Amicus Curiae Brief — Actavis Holdco U.S., Inc., et al., Petitioners v. Connecticut, et al.

No. 19-1010

IN THE

Supreme Court of the United States

ACTAVIS HOLDCO, INC., et al.,

Petitioners,

v.

STATE OF CONNECTICUT, et al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Third Circuit

BRIEF OF AMICUS CURIAE DRI—THE VOICE

OF THE DEFENSE BAR IN SUPPORT OF

PETITIONERS

PHILIP L. WILLMAN

PRESIDENT OF DRI—THE VOICE

OF THE DEFENSE BAR

BROWN & JAMES PC

800 Market Street

Suite 1100

St. Louis, MO 63101

(314) 421-3400

pwillman@bjpc.com

SCOTT BURNETT SMITH

Counsel of Record

BRADLEY ARANT BOULT

CUMMINGS LLP

200 Clinton Avenue West

Suite 900

Huntsville, AL 35801

(256) 517-5100

ssmith@bradley.com

CAROLINE D. SPORE

BRADLEY ARANT BOULT

CUMMINGS LLP

1600 Division Street

Suite 700

Nashville, TN 37203

Counsel for Amicus Curiae

i

TABLE OF CONTENTS

TABLE OF AUTHORITIES ...................................... ii

INTEREST OF THE AMICUS CURIAE .................. 1

SUMMARY OF THE ARGUMENT .......................... 2

ARGUMENT .............................................................. 5

I.

The District Court’s Discovery Order

Inverts the Presumption of Good Faith

Underlying the Federal Civil Discovery

System. ............................................................ 5

II.

The Discovery Order Compounds the

Risks Facing Defendants in MDLs. ................ 9

III.

The District Court’s Order Implicates

Serious Constitutional Concerns. ................. 14

CONCLUSION......................................................... 20

ii

TABLE OF AUTHORITIES

Cases

Page(s)

Boddie v. Connecticut,

401 U.S. 371 (1971) .............................................. 5

Carpenter v. United States

484 U.S. 19 (1987) .......................................... 4, 15

Cheney v. U.S. Dist. Court for D.C.,

542 U.S. 367 (2004) .............................. 5, 6, 13, 19

Bd. of Trade of Chicago v.

Christie Grain & Stock Co.,

198 U.S. 236 (1905) ............................................ 15

Cleveland Bd. of Educ. v. Loudermill,

470 U.S. 532 (1985) ............................................ 19

Dirks v. S.E.C.,

463 U.S. 646 (1983) ............................................ 15

E.E.O.C. v. Simply Storage Mgmt., LLC,

270 F.R.D. 430 (S.D. Ind. 2010) ........................... 7

Fuentes v. Shevin,

407 U.S. 67 (1972) .............................................. 17

Grange Mut. Cas. Co. v. Mack,

270 F. App’x 372 (6th Cir. 2008) .......................... 7

Hughes v. Washington,

389 U.S. 290 (1967) ............................................ 16

iii

Kaiser Aetna v. United States,

444 U.S. 164 (1979) ............................................ 16

Littlejohn v. BIC Corp.,

851 F.2d 673 (3d Cir. 1988) .................................. 7

Ruckelshaus v. Monsanto Co.,

467 U.S. 986 (1984) ...................................... 15, 16

Shady Grove Orthopedic Assocs., P.A.

v. Allstate Ins. Co.,

559 U.S. 393 (2010) ............................................ 12

Stevens v. City of Cannon Beach,

114 S. Ct. 1332 (1994) ........................................ 16

United States v. James Daniel Good Real Prop.,

510 U.S. 43 (1993) .............................................. 17

United States v. O’Hagen,

521 U.S. 642 (1997) ............................................ 15

Zinermon v. Burch,

494 U.S. 113 (1990) ............................................ 18

Statutes

28 U.S.C. § 1407 ........................................................ 10

28 U.S.C.§ 2072 ......................................................... 19

Rules

Fed. R. Civ. P. 26 ................................................ 6, 7, 8

iv

Fed. R. Civ. P. 37 .................................................... 6, 8

S. Ct. R. 37 .................................................................. 1

Constitutional Provisions

U.S. Const. amend. V................................................ 14

Other Authorities

Andrew S. Pollis,

The Need for Non-Discretionary Interlocutory

Appellate Review in Multidistrict Litigation,

79 Fordham L. Rev. 1646 (2011) .................. 11, 12

Duke Law Center for Judicial Studies,

MDL Standards and Best Practices (Sept. 11,

2014), https://law.duke.edu/sites/default/files/cent

ers/judicialstudies/MDL_Standards_and_Best_Pr

actices_2014-REVISED.pdf................................ 10

Elizabeth Chamblee Burch,

Monopolies in Multidistrict Litigation,

70 Vand. L. Rev. 67 (2017) ................................. 14

Elizabeth Chamblee Burch,

Remanding Multidistrict Litigation,

75 La. L. Rev. 399 (2014) ..................................... 9

Elizabeth Chamblee Burch,

Judging Multidistrict Litigation,

90 N.Y.U. L. Rev. 71 (2015) ............................... 12

v

Jay Tidmarsh & Daniela Peinado Welsh,

The Future of Multidistrict Litigation,

51 Conn. L. Rev. 769 (2019) ............................... 10

Lawyers for Civil Justice,

Request for Rulemaking to the Advisory

Committee

on

Civil

Rules

(Aug.

10,

2017), https://www.lfcj.com/uploads/1/1/2/0/11206

1707/lcj_request_for_rulemaking_concerning_md

l_cases_8-10-17.pdf ............................................. 10

Margaret S. Williams, Emery G. Lee III & Catherine

R. Borden,

Repeat Players in Federal Multidistrict Litigation,

5 J. Tort L. 141, 171 (2012) .......................... 13, 14

Mark Herrmann,

To MDL or Not to MDL? A Defense Perspective,

24 Litigation 43 (1998) ....................................... 11

Martin H. Redish & Julie M. Karaba,

One Size Doesn’t Fit All: Multidistrict Litigation,

Due Process, and the Dangers of Procedural

Collectivism,

95 B.U. L. Rev. 109 (2015) ................................. 11

The Case for Cooperation,

10 Sedona Conf. J. 339 (2009) .......................... 6, 7

1

INTEREST OF THE AMICUS CURIAE 1

DRI—The Voice of the Defense Bar (www.dri.org)

is an international membership organization

composed of approximately 20,000 attorneys involved

in the defense of parties in civil litigation. DRI’s

mission includes promoting appreciation of the role of

defense lawyers in the civil justice system, addressing

substantive and procedural issues germane to defense

lawyers and their clients, improving the civil justice

system, and preserving the civil jury. To help foster

these objectives, DRI participates as amicus curiae at

both the certiorari and merits stages in carefully

selected Supreme Court appeals presenting questions

that are important to civil defense attorneys, their

clients, and the conduct of civil litigation.

This case is of significant interest to DRI

members and their clients, many of which have been

or currently are involved in the defense of large-scale

MDL cases. DRI and its members have seen firsthand

how mounting discovery costs and associated

pressures

can

coerce

settlements

without

consideration for actual liability.

The case

management order adopted by the district court will

1. In accordance with Supreme Court Rule 37.6, amicus

curiae DRI—The Voice of the Defense Bar certifies that no

counsel for a party authored this brief in whole or in part, and

that no party or counsel other than DRI, its members, and its

counsel, made a monetary contribution intended to fund

preparation or submission of this brief. In accordance with

Supreme Court Rule 37.2, counsel of record for all parties

received notice at least ten days prior to the due date of the

intention to file this brief and have provided written consent to

the filing of this amicus curiae brief.

2

only worsen these problems, placing parties such as

Petitioners in the untenable position of choosing

between paying a large settlement when liability has

not been established or undergoing an extremely

expensive discovery process that will require them to

reveal swaths of proprietary, confidential, and

competitively sensitive information. DRI urges this

Court to hold judges presiding over multidistrict

litigation accountable for fairly and accurately

enforcing the Federal Rules of Civil Procedure. Doing

so will mitigate some of the economic burdens facing

defendants in these cases and will ultimately better

effectuate the Rules’ goal of promoting mutual

cooperation in discovery. Perhaps most importantly,

discovery orders like the one entered here threaten to

deprive litigants of their intellectual property without

just compensation or due process of law. DRI

members and their clients have a significant interest

in ensuring the protection of intellectual property, and

for this reason also would ask the Court to grant

Petitioners relief.

SUMMARY OF THE ARGUMENT

This case is not a garden-variety discovery

dispute. Rather, the Court is presented with a clear

abuse of judicial power in a context (multidistrict

litigation) that is especially fertile ground for such

abuses. Petitioners and DRI’s fellow amici have

provided this Court with numerous compelling

reasons in support of reversing the Third Circuit’s

denial of mandamus relief. DRI has identified three

additional reasons why this Court should grant

certiorari.

3

First, the district court’s “produce first, review

later” order not only contradicts the text of Rule 26,

but also inverts a basic presumption undergirding the

federal civil discovery system. The Federal Rules

presume all litigants will act in good faith, trusting

parties to first review their own documents and in

good faith produce responsive documents to the other

side. If evidence is put forth showing that a party has

obstructed discovery or otherwise failed to cooperate,

then sanctions may be imposed. However, the Rules

do not support the assumption the district court made

here: that parties in Petitioners’ position cannot be

trusted to conduct a pre-production relevance review

in good faith and should therefore be required to turn

over everything they have. Civil discovery was

designed to be a largely self-regulating process with

judicial intervention only as necessary. The Rules

neither contemplate nor authorize the presumption

that litigants will be obstructionist if permitted to

review their own documents for responsiveness before

production.

Second, the discovery order compounds the

significant pressures facing defendants involved in

MDLs. MDLs already operate in a sort of “no man’s

land” due to their unique structure. Since certain

components of the Federal Rules of Civil Procedure

are difficult to apply in MDL cases, such as procedures

for dismissal or summary judgment, judges routinely

improvise. This judicial improvisation often goes

unchecked, causing dynamic spillover to situations

where, as here, the Rules unequivocally speak to the

correct procedure. Judges presiding over MDLs have

an extraordinary amount of power, and their decisions

are rarely subject to judicial review. Most MDLs end

4

in settlement, and indeed many MDL judges

(including the district court here) view promotion of

settlement as their goal. Because defendants usually

give in to the enormous settlement pressures, there

are frequently few, if any, dispositive orders entered

in MDLs. Instead, most orders are interlocutory,

meaning that mandamus is the only avenue for relief.

The discovery order entered here, and the Third

Circuit’s subsequent denial of mandamus, is a perfect

case study of the ways in which these issues interact

to oppress defendants. If the Court does not reverse,

the highly organized “repeat players” in the MDL

plaintiffs’ bar will be able to argue that the Court

endorses the “produce first, review later” approach

adopted here, opening the floodgates to such coercive

discovery orders in other MDLs.

Third, the discovery order implicates the Fifth

Amendment’s Takings Clause and Due Process

Clause. Because of the huge volume of documents at

issue and the nature of the proposed search terms, the

order will compel production of invaluable intellectual

property. In fact, because the search terms will

include all drugs identified by plaintiffs in their

claims, the order may even require production of

“crown jewel” trade secrets, such as pharmaceutical

formulae. “Confidential business information has

long been recognized as property.” Carpenter v.

United States, 484 U.S. 19, 26 (1987). Compelling

Petitioners to produce their intellectual property

without allowing them an opportunity to object before

production takes their property without just

compensation and denies them due process of law.

The post-deprivation “clawback” remedy is wholly

inadequate, since intellectual property loses a

5

significant amount of its value with each disclosure

(i.e., after production). At any rate, the absence of a

pre-deprivation remedy alone is sufficient to

invalidate the order. It is a “root requirement that an

individual be given an opportunity for a hearing before

he is deprived of any significant property interest,

except for extraordinary situations where some valid

governmental interest is at stake that justifies

postponing the hearing until after the event.” Boddie

v. Connecticut, 401 U.S. 371, 379 (1971) (emphasis

added). No such “valid governmental interest” exists

here, nor did the district court make any attempt to

articulate one.

A writ of mandamus should be issued “upon a

finding of exceptional circumstances amounting to a

judicial usurpation of power or a clear abuse of

discretion.” Cheney v. U.S. Dist. Court for D.C., 542

U.S. 367, 390, (2004) (internal quotation marks and

citations omitted). Though the Court need not apply

Cheney to exercise certiorari jurisdiction, see

Petitioners’ Reply Brief in Support of Application for

Stay, at 9, it would be hard-pressed to find a better

example of an order meeting this standard.

Accordingly, the Court should grant review.

ARGUMENT

I.

The District Court’s Discovery Order

Inverts the Presumption of Good Faith

Underlying the Federal Civil Discovery

System.

The discovery order not only contradicts the

plain text of the Federal Rules of Civil Procedure, but

it also inverts an essential premise embedded in the

6

federal civil discovery system: litigants are presumed

to act in good faith and cooperate with one another.

Of course, this presumption is not irrebuttable, and

courts may impose sanctions properly where they

have found abuse of the discovery process. See Fed. R.

Civ. P. 37 (authorizing sanctions for failure to

cooperate in discovery or obey discovery orders).

Nowhere do the Rules authorize imposing discovery

sanctions without any finding of bad faith or refusal

to cooperate. Yet the district court did just this,

sanctioning the Petitioners preemptively by requiring

them to produce millions of documents without

reviewing for relevance. The order upends the

presumption of mutual cooperation undergirding the

Rules, “amounting to a judicial usurpation of power”

that must be corrected via mandamus relief. Cheney,

542 U.S. at 390 (internal quotation marks omitted).

“[T]he Federal Rules of Civil Procedure

encourage and in many respects assume cooperation

during discovery.” The Case for Cooperation, 10

Sedona Conf. J. 339, 355 (2009). This assumption is

borne out in the Advisory Committee Notes to Rule 26.

In discussing the 1983 amendment to Rule 26, for

example, the notes explain that Rule 26(g)’s

certification requirement was adopted to ensure that

“primary responsibility for conducting discovery [can]

continue to rest with the litigants.” Fed. R. Civ. P. 26

advisory committee’s notes (1983). Thus, “Rule 26(g)

imposes an affirmative duty to engage in pretrial

discovery in a responsible manner that is consistent

with the spirit and purposes of Rules 26 through 37.”

Id. (emphasis added). Similarly, when addressing the

2000 amendment to subsection (b)(1), the notes

emphasize the “hope[] that reasonable lawyers can

7

cooperate to manage discovery without the need for

judicial intervention.” Fed. R. Civ. P. 26 advisory

committee’s notes (2000). According to the Advisory

Committee, then, the Rules have been amended to

promote a self-regulating, cooperative system. This is

the hallmark of federal civil discovery. See The Case

for Cooperation, 10 Sedona Conf. J. at 345 (“The

Federal Rules of Civil Procedure do not explicitly

require counsel to cooperate in discovery, but the duty

is implicit in the structure and spirit of the Rules.”).

Appellate and district courts alike have also

recognized that the presumption of good faith is

crucial to the smooth operation of civil discovery in an

adversarial system. See, e.g., Grange Mut. Cas. Co. v.

Mack, 270 F. App’x 372, 378 (6th Cir. 2008) (“Our civil

legal system hinges on voluntary discovery.”);

Littlejohn v. BIC Corp., 851 F.2d 673, 684 (3d Cir.

1988) (“[O]ur system of discovery relies on the

cooperation and integrity of attorneys operating

within the guidelines provided by the Federal Rules of

Civil Procedure and the provisions of any protective

order.”); E.E.O.C. v. Simply Storage Mgmt., LLC, 270

F.R.D. 430, 436 (S.D. Ind. 2010) (“Discovery is

intended to be a self-regulating process that depends

on the reasonableness and cooperation of counsel.”).

As these decisions recognize, good faith and

cooperation are not merely abstract, aspirational

concepts; they are necessary for civil discovery to

function properly. Indeed, the Sedona Conference has

called cooperation “an essential element of the logic

underlying [the Federal Rules].”

The Case for

Cooperation, 10 Sedona Conf. J. at 345.

8

The district court’s order inverts this “essential

element of the [Rules’] logic.” See id. It forbids

Petitioners from “withhold[ing] prior to production

any documents based on relevance or responsiveness.”

App. 33a. This “produce first, review later” logic

presumes bad faith, implying that litigants in

Petitioners’ position cannot be trusted to conduct a

review for responsiveness fairly and without undue

delay. Such a presumption cannot be squared with

the “affirmative duty” of good faith that the Rules

impose. Fed. R. Civ. P. 26 advisory committee’s notes

(1983). Nor can it be squared with the text of the

Rules, under which a party seeking sanctions must

rebut the presumption of cooperation by submitting “a

certification that the movant has in good faith

conferred or attempted to confer with the party failing

to act.” Fed. R. Civ. P. 37(d)(1)(B).

The fact that the order was styled as a “Case

Management Order” rather than a sanction does not

change its substance. The district court’s discovery

order is decidedly punitive. It requires Petitioners to

produce millions of documents (many of which contain

sensitive, confidential, or proprietary information)

without regard to relevance or responsiveness. To

“protect” Petitioners’ sensitive documents, the order

authorizes them to “claw back” documents after

production. As Petitioners argue in their brief,

though, this is a completely “unprecedented” use of

the “clawback” remedy, which has only been adopted

in Rule 26(b)(5)(B) to “provide[] post-disclosure

remedies for inadvertently produced documents” that

are privileged or protected work product. Petition for

Writ of Certiorari, at 2, 10 (citing Fed. R. Civ. P.

26(b)(5)(B)).

Consistent with the principles of

9

cooperation and good faith underlying the Rules, Rule

26(b)(5)(B) recognizes that parties will try to get

things right but may make mistakes, and it allows

them to correct those mistakes. The district court’s

“clawback” provision, on the other hand, implies that

parties will not try to comply with the Rules and

cannot be trusted to review their own documents. It

thus authorizes punishing parties preemptively for

violations that have not yet occurred.

As Judge Phipps reasoned in his dissent from

the Third Circuit’s denial of mandamus relief, “[t]he

sequence of events in discovery is important.” App.

4a. Though Judge Phipps was referring to the need

for relevance review before production, his logic holds

equally true in the sanctions context. The Rules

presume good faith and for that reason authorize

sanctions only when the presumption of good faith has

been rebutted. The district court presumed bad faith,

anticipatorily punishing Petitioners when they had

committed no discovery abuses. The Third Circuit’s

decision to deny mandamus relief in the face of this

clear judicial overreaching should be reversed.

II.

The Discovery Order Compounds the

Risks Facing Defendants in MDLs.

The district court’s order would be problematic

enough were it entered in a “typical” lawsuit. But its

ramifications are compounded by the fact that it was

entered in an MDL—a type of litigation that is often

described as a “black hole.” Elizabeth Chamblee

Burch, Remanding Multidistrict Litigation, 75 La. L.

Rev. 399, 400 (2014). MDLs have presented enormous

economic and logistical difficulties for DRI’s members

10

and clients. If the discovery order in this case is

permitted to stand, these difficulties will increase

exponentially.

The MDL statute authorizes transfer of “civil

actions involving one or more common questions of

fact” to a selected district “for coordinated or

consolidated pretrial proceedings.”

28 U.S.C.

§ 1407(a). Though the MDL statute was clearly

intended to serve as a simplifying mechanism, “many

have expressed concerns that MDL proceedings have

become the Wild West of aggregation law.” Jay

Tidmarsh & Daniela Peinado Welsh, The Future of

Multidistrict Litigation, 51 Conn. L. Rev. 769, 773

(2019). Such concerns are not unfounded.

Perhaps the most significant issue facing MDL

litigants is the lack of clear, uniform procedural rules.

The Federal Rules “no longer provide practical

presumptive procedures in MDL cases,” which differ

in format from standard lawsuits or class actions.

Lawyers for Civil Justice, Request for Rulemaking to

the Advisory Committee on Civil Rules 1 (Aug. 10,

2017), https://www.lfcj.com/uploads/1/1/2/0/11206170

7/lcj_request_for_rulemaking_concerning_mdl_cases_

8-10-17.pdf. Without the full benefit of the Rules,

“judges and parties are improvising.” Id. Judges

assigned to proceed over a mass-tort MDL “have

developed disparate approaches—some effective,

some not so effective—to dispose of the cases without

the benefit of rules or a set of best practices.” Duke

Law Center for Judicial Studies, MDL Standards and

Best

Practices

xii

(Sept.

11,

2014),

https://law.duke.edu/sites/default/files/centers/judicia

lstudies/MDL_Standards_and_Best_Practices_2014-

11

REVISED.pdf. Judges’ resort to improvisation and ad

hoc solutions, however, can undermine the very

consistency that the MDL statute was intended to

promote.

The dearth of clear guidelines and rules creates

a significant risk of judicial overreaching, as occurred

here. In a large MDL, one district judge exercises

authority over thousands of cases.

Such

“[c]consolidation of power in a single federal judge,”

while it offers some advantages, “ratchets up

considerably the risk and consequences of legal error.”

Andrew S. Pollis, The Need for Non-Discretionary

Interlocutory Appellate Review in Multidistrict

Litigation, 79 Fordham L. Rev. 1643, 1646 (2011). “A

single judge’s thinking exerts a disproportionate

influence on the evolution of the law.” Id. Where that

judge makes a decision that is clearly erroneous or an

abuse of discretion, the impacts of that decision are

felt not just in one individual case, but in all the

hundreds or thousands of cases comprising the MDL.

There is also, crucially, very limited

opportunity for appellate review. While this is due to

several factors, two are particularly important to DRI

members and their clients. First, “[s]ettlement is the

fate of almost all cases that are part of an MDL.”

Martin H. Redish & Julie M. Karaba, One Size Doesn’t

Fit All: Multidistrict Litigation, Due Process, and the

Dangers of Procedural Collectivism, 95 B.U. L. Rev.

109, 128 (2015).

Not only do defendants face

significant settlement pressures due to the high cost

and exposure risk of MDL litigation, but also many

judges presiding over MDL cases “view their role as

‘getting the parties to a claims process’—a

12

settlement—as quickly as possible. Confronted with

such a judge, the client can no longer hope to prevail

simply because it has done nothing wrong.” Mark

Herrmann, To MDL or Not to MDL? A Defense

Perspective, 24 Litigation 43, 45 (1998) (emphasis

added).

This disheartening reality means that

defendants in MDLs are often expected to pay a large

sum as a settlement; the only real issues are how large

the sum will be and how the settlement will be

structured. Cf. Shady Grove Orthopedic Assocs., P.A.

v. Allstate Ins. Co., 559 U.S. 393, 445 n.3 (2010)

(Ginsburg, J., dissenting) (internal quotation marks

and citations omitted) (“Even in the mine-run case, a

class action can result in potentially ruinous liability.

A court’s decision to certify a class accordingly places

pressure on the defendant to settle even

unmeritorious claims.”).

The second factor limiting appellate review

relates to the prevalence of MDL settlements.

Because most cases will end in settlement, all but a

fraction of orders entered in MDLs are interlocutory

and “reviewable only through an extraordinary writ of

mandamus or subsequent dismissal.”

Elizabeth

Chamblee Burch, Judging Multidistrict Litigation, 90

N.Y.U. L. Rev. 71, 85 (2015). Inability to obtain

regular appellate review allows errors to go

uncorrected and enables MDL judges to operate with

near-impunity. See id. at 73 (“[T]he transferee judges

who use innovative procedures to usher these cases

toward settlement are rarely subject to appellate

scrutiny or legislative oversight.”); Pollis, The Need for

Non-Discretionary Interlocutory Appellate Review in

Multidistrict Litigation, 79 Fordham L. Rev. at 1647

(“[T]he absence of guaranteed appellate review over

13

MDL

cases

consequences.”).

has

increasingly

significant

The district court’s entry of the discovery order

and the Third Circuit’s subsequent denial of

mandamus relief exemplify the foregoing concerns.

The order directly contradicts the text of the Federal

Rules, as well as the policies behind civil discovery. It

was proposed in part because the Special Master

found that “extensive and broad-ranging discovery”

was “essential for any meaningful settlement

discussions, since cases like this are usually

ultimately settled.” App. 29a. And because the order

was interlocutory, Petitioners were required to seek

mandamus relief. Yet despite the district court’s

“clear abuse of discretion,” see Cheney, 542 U.S. at

390, a divided panel of the Third Circuit declined to

grant relief—completely foreclosing Petitioners’

ability to obtain review of the discovery order unless

this Court grants their Petition. If review is denied,

Petitioners will be forced to choose between two

unacceptable options: proceeding with the oppressive

discovery ordered by the district court or settling

where no liability has been established.

Review should be granted by this Court to

impose limits on the coercive power of discovery in the

MDL context. Because all other avenues of appellate

review are foreclosed, plaintiff’s attorneys will view a

denial of mandamus relief as a tacit endorsement of

the district court’s order. In turn, plaintiff’s attorneys

will begin demanding that MDL defendants produce

documents without reviewing for relevance or

responsiveness.

Again, these concerns are not

unfounded. “[T]he MDL plaintiffs’ bar is highly

14

structured around a small number of very active

repeat-player attorneys, many of whom can be said to

‘specialize’ in more than one type of MDL proceeding.”

Margaret S. Williams, Emery G. Lee III & Catherine

R. Borden, Repeat Players in Federal Multidistrict

Litigation, 5 J. Tort L. 141, 171 (2012); see also

Elizabeth

Chamblee

Burch,

Monopolies

in

Multidistrict Litigation, 70 Vand. L. Rev. 67, 80 (2017)

(noting that “plaintiffs’ leadership is rife with repeat

players”).

These repeat players form a highly

organized “network,” which “not only brings in other

repeat players but also pulls single-shot attorneys into

relationships they may not otherwise have had.”

Williams, Lee, & Borden, Repeat Players in Federal

Multidistrict Litigation, 5 J. Tort L. at 151. From

experience, DRI members and their clients can attest

that these networks share work product, tactical

insights, discovery, and expert witness information.

Economic efficiencies and strategic advantages follow

as a matter of course. The discovery order here

presents a perfect opportunity for this highly

organized network of “repeat players” to seek similar

far-reaching discovery orders in other MDL cases in

hopes of coercing a more favorable settlement. This

Court should course-correct and prevent MDLs from

truly becoming “black holes.”

III.

The District Court’s Order Implicates

Serious Constitutional Concerns.

Finally, the discovery order requiring

Petitioners to produce millions of documents without

reviewing for “relevance or responsiveness,” see App.

33(a), risks depriving Petitioners of their property

without just compensation or due process of law in

15

violation of the Fifth Amendment. See U.S. Const.

amend. V (“No person shall . . . be deprived of life,

liberty, or property, without due process of law; nor

shall private property be taken for public use, without

just compensation.”).

Compelled production of

intellectual

property

without

compensation

constitutes a taking, and Petitioners have no

adequate pre- or post-deprivation remedy against this

forced disclosure.

The order’s constitutional

deficiencies require mandamus relief.

As this Court has observed, “[c]onfidential

business information has long been recognized as

property.” Carpenter, 484 U.S. at 26 (first citing

Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1001–04

(1984); then citing Dirks v. S.E.C., 463 U.S. 646, 653

n.10 (1983); and then citing Bd. of Trade of Chicago v.

Christie Grain & Stock Co., 198 U.S. 236, 250–51

(1905)); see also United States v. O’Hagen, 521 U.S.

642, 654 (1997) (“A company’s confidential

information . . . qualifies as property to which the

company has a right of exclusive use.”). Because of

the volume of documents at issue and breadth of the

search terms, the discovery order will compel

production of invaluable intellectual property, which

likely will include “crown jewel” trade secrets, such as

pharmaceutical formulae.

Even if Respondents’

proposed broad search terms are narrowed,

Petitioners will still be forced to produce some amount

of proprietary documents that are unrelated to any

issue in the underlying litigation.

Even more

concerning, Petitioners may be required to produce

documents containing proprietary or confidential data

belonging to third parties that do business with

Petitioners, such as outside consultants. These third

16

parties would have no reason to suspect that their

proprietary information could be disclosed in a

lawsuit where they are nonparties and the

information is entirely irrelevant to the claims at

issue.

Given that Petitioners (and the third parties)

have an undisputed property interest in their

intellectual property, the question becomes whether

the discovery order constitutes a “taking” of this

property interest. It does. “[O]ne of the most essential

sticks in the bundle of rights that are commonly

characterized as property” is “the right to exclude

others.” Kaiser Aetna v. United States, 444 U.S. 164,

176 (1979). “With respect to a trade secret, the right

to exclude others is central to the very definition of the

property interest.” Ruckelshaus, 467 U.S. at 1011.

The value of intellectual property is based upon

continued secrecy, and every disclosure dilutes that

value. This Court has therefore recognized that when

trade secrets are disclosed to others, the owner has

been divested of his property. See id. The fact that

such disclosure has been ordered by a court makes no

difference; courts can operate as state actors for

purposes of the Takings Clause. See Stevens v. City of

Cannon Beach, 114 S. Ct. 1332, 1334 (1994) (Scalia

and O’Connor, JJ., dissenting from denial of

certiorari) (“No more by judicial decree than by

legislative fiat may a State transform private property

into public property without compensation.”); Hughes

v. Washington, 389 U.S. 290, 298 (1967) (Stewart, J.,

concurring) (“[T]he Due Process Clause of the

Fourteenth Amendment forbids such confiscation [of

property] by a State, no less through its courts than

through its legislature . . . .”).

By compelling

17

Petitioners to disclose irrelevant documents

containing intellectual property, the discovery order

infringes on the owners’ right to exclude others and

takes property without compensation or remedy.

The absence of any adequate remedy for

Petitioners’ property deprivation also raises due

process concerns. This Court has “establish[ed] the

general rule that individuals must receive notice and

an opportunity to be heard before the Government

deprives them of property.” United States v. James

Daniel Good Real Prop., 510 U.S. 43, 48 (1993)

(emphasis added). While the Court “tolerate[s] some

exceptions

to

the

general

rule

requiring

predeprivation notice and hearing,” these exceptions

are reserved for “extraordinary situations where some

valid governmental interest is at stake that justifies

postponing the hearing until after the event.” Id. at

53 (quoting Fuentes v. Shevin, 407 U.S. 67, 82 (1972)).

The discovery order does not afford Petitioners either

type of hearing opportunity, running headlong into

the Due Process Clause.

The order does not give Petitioners any

opportunity for a pre-deprivation hearing. Petitioners

are required to produce all documents containing the

requisite search terms and may only withhold on

grounds of privilege. See App. 33a. Therefore, any

objections Petitioners have to producing irrelevant,

proprietary documents cannot be heard before the

documents are produced. In other words, they have

no ability to object before they are deprived of their

interest in maintaining the secrecy of their

intellectual property, trade secrets, or other

confidential business information.

18

In the absence of an opportunity for a predeprivation hearing, Petitioners must be afforded a

post-deprivation hearing, and the “governmental

interest” must be sufficiently “extraordinary” to

justify the denial of a pre-deprivation remedy.

Neither circumstance is present here. The only postdeprivation protection given to Petitioners is the 120day “clawback” provision: “[D]ocuments are stamped

‘Outside Counsel Eyes Only’ for 120 days, with

requests to claw back made within 120 days of

production.” App. 21a. This is not an adequate

remedy because it cannot undo the dilution in value

that takes place with the initial production of trade

secrets and confidential business information. The

bell cannot be un-rung. Once documents leave

Petitioners’ control, their value as intellectual

property is diluted, and there is a greater risk of

further dissemination. Indeed, despite the “Outside

Counsel Eyes Only” designation, Petitioners have

noted that “[t]his case has already seen multiple leaks

of sealed filings and confidential materials.” Petition

for Writ of Certiorari, at 34 n.8.

Finally, even if the post-deprivation remedy

were adequate, the absence of a pre-deprivation

remedy in these circumstances is enough to render the

discovery order constitutionally infirm. “In situations

where the State feasibly can provide a predeprivation

hearing before taking property, it generally must do

so regardless of the adequacy of a postdeprivation tort

remedy to compensate for the taking.” Zinermon v.

Burch, 494 U.S. 113, 132 (1990) (emphasis added).

Here,

the

pre-deprivation

remedy—allowing

Petitioners to withhold non-responsive, confidential

documents—is not only feasible, but is required by the

19

Federal Rules of Civil Procedure. The district court

provided no colorable justification for departing from

the Rules in such a stark fashion. In fact, it put the

burden on Petitioners to show why the postdeprivation remedy was inadequate, reasoning that

“Defendants have not shown that reviewing

information for relevance before production, instead of

through the claw back procedures . . . is appropriate

in this litigation.” App. 24a. This is certainly

inconsistent with the strictures of due process, under

which the government bears responsibility for

justifying the procedural safeguards available to

protect the property interest. The district court’s

application of the Federal Rules also conflicts with the

Rules Enabling Act, which provides that rules of

procedure “shall not abridge, enlarge, or modify any

substantive right.” 28 U.S.C.§ 2072(b); cf. Cleveland

Bd. of Educ. v. Loudermill, 470 U.S. 532, 541 (1985)

(“[T]he Due Process Clause provides that certain

substantive rights—life, liberty, and property—

cannot

be

deprived

except

pursuant

to

constitutionally adequate procedures.”).

In sum, the district court’s discovery order will

require production of Petitioners’ confidential,

proprietary, and competitively sensitive data, and

may even sweep in proprietary data belonging to

unsuspecting third parties. Many of these documents

will be irrelevant and, under the ordinary meaning of

Rule 26, should not have been produced in the first

place. Petitioners will not be compensated for loss of

the exclusive use of their property, nor do they have

any adequate pre- or post-deprivation remedy.

Mandamus relief should issue to correct this clear

20

“judicial usurpation of power.” See Cheney, 542 U.S.

at 390.

CONCLUSION

For the foregoing reasons, the Court should

grant the Petition for Writ of Certiorari.

Respectfully submitted,

PHILIP L. WILLMAN

PRESIDENT OF DRI—THE

VOICE OF THE DEFENSE

BAR

BROWN & JAMES PC

800 Market Street

Suite 1100

St. Louis, MO 63101

(314) 421-3400

pwillman@bjpc.com

SCOTT BURNETT SMITH

Counsel of Record

BRADLEY ARANT BOULT

CUMMINGS LLP

200 Clinton Avenue West

Suite 900

Huntsville, AL 35801

(256) 517-5100

ssmith@bradley.com

CAROLINE D. SPORE

BRADLEY ARANT BOULT

CUMMINGS LLP

1600 Division Street

Suite 700

Nashville, TN 37203

Counsel for Amicus Curiae

March 16, 2020