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Federal Trade Commission v. Boehringer Ingelheim Pharmaceuticals, Inc.

United States District Court, District of Columbia

March 15, 2017




         Over seven years ago, the Federal Trade Commission (“FTC”) petitioned this Court for an order instructing Boehringer Ingelheim Pharmaceuticals, Inc. (“Boehringer”) to comply with a subpoena to produce documents for an ongoing FTC investigation. Following a decision from this Court, an appeal to and remand from the D.C. Circuit, and another decision from this Court consistent with the D.C. Circuit's guidance, Boehringer now moves to stay the Court's most recent Order “until all appeals, including any appeal to the United States Supreme Court, have been resolved.” Resp. Mot. [Dkt. 109] at 2. Boehringer's Motion to Stay Production of Privileged Documents Pending Appeal is now ripe for adjudication. Based on a review of the relevant submis-sions[1] and for the reasons set out below, Boehringer's motion for a stay is hereby DENIED.


         The relevant facts underlying these proceedings are more fully described in the Court's prior opinions and in the decision of the Court of Appeals. See FTC v. Boehringer Ingelheim Pharmaceuticals, Inc., 286 F.R.D. 101, 104-06 (D.D.C. 2012) (“Boehringer I”), aff'd in part, rev'd in part, and remanded, 778 F.3d 142 (D.C. Cir. 2015); FTC v. Boehringer Ingelheim Pharmaceuticals, Inc., 778 F.3d 142, 146-48 (D.C. Cir. 2015) (“Boehringer II”); FTC v. Boehringer Ingelheim Pharmaceuticals, Inc., 180 F.Supp.3d 1, 6-16 (D.D.C. 2016) (“Boehringer III”). The Court will provide only the important background information here.

         A. Boehringer-Barr Litigation and the FTC Subpoena

         The FTC filed this action to enforce an administrative subpoena duces tecum directed at Boehringer for an FTC investigation of a settlement agreement in a patent lawsuit between Boehringer and a generic drug manufacturer, Barr Laboratories (“Barr”). See Memorandum in Support of Petition to Enforce Subpoena [Dkt. 1-4] at 1-2. The FTC hopes to learn whether Boehringer and Barr violated antitrust laws. Id. In the subpoena, the FTC seeks documents from Boehringer relating to the patent litigation, the settlement of that litigation, and other agreements between Boehringer and Barr entered into at the time of settlement. Id. at 5-6.

         To summarize, Barr developed generic versions of two drugs that Boehringer manufactures, Aggrenox and Mirapex, and Boehringer sued Barr for patent infringement. See Boehringer Ingel-heim Int'l GmbH v. Barr Labs., 562 F.Supp.2d 619, 622 (D. Del. 2008), rev'd 592 F.3d 1340 (Fed. Cir. 2010). After Boehringer lost at trial but won on appeal before the Federal Circuit, the parties agreed to settle the case and submitted their settlement to the FTC. See Boehringer I, 286 F.R.D. at 105. During the course of the lawsuit, Marla S. Persky, the Senior Vice President and General Counsel of Boehringer, helped advise her client on the settlement agreement. Id.

         After the settlement, the FTC opened a formal investigation to determine whether Boehringer and Barr had engaged in unfair methods of competition through their settlement and other agreements. Id. The FTC was specifically concerned that Barr agreed to delay marketing its generic drugs, thereby giving Boehringer a monopoly on profits for a time, in exchange for a payoff from Boehringer using those sales. Id. To aid in its investigation, the FTC served a subpoena on Boerhringer for documents concerning: (1) the patent litigation; (2) sales, profits, and marketing of the brand-name drugs; (3) the settlement agreement; (4) co-marketing with Barr and other firms; (5) Barr's marketing of the generics; and (6) analyst reports on the drugs. Id.

         B. Boehringer I and II

         After Boehringer reported that it had fully complied with the subpoena, the FTC filed an objection, noting that Boehringer had withheld many relevant documents under claims of work-product protection and attorney-client privilege. Id. at 106. The FTC identified four categories of documents that it believes Boehringer improperly withheld: (1) financial analyses of a co-promotion agreement between Boehringer and Barr regarding Aggrenox; (2) forecasting analyses of possible timelines for Barr's generic drug to enter the market; (3) financial analyses of the business terms of the settlement agreement; and (4) notes taken by business executives. Id. at 108. The FTC argued that it had “an overriding and compelling need” for disclosure of these documents and that the attorney-client privilege did not apply to them because they were “business documents that had no attorney as an author or recipient, or included an attorney only as part of a distribution to business executives.” Id. In response, Boehringer provided a sample set of documents for the Court to review in camera and also submitted in camera and ex parte affidavits from attorney Persky and attorney Pamela Taylor, who represents Boehringer in the FTC investigation. Id. at 109.

         After examining those documents, this Court issued a decision sustaining in part and overruling in part Boehringer's assertions of privilege. With respect to the financial analyses of a co-promotion agreement between Boehringer and Barr on Aggrenox, forecasting analyses regarding Barr's generic drug, and financial analyses used to evaluate the settlement agreement, the Court concluded that these documents were “an integral part of the litigation” and that information used to assess settlement options “clearly falls within the ambit of the work product doctrine.” Id. Further, the Court determined that these documents constituted opinion work product, which enjoys stricter protection than fact work product, and that the FTC could not discover them. Id. at 110. The Court also examined a number of emails, notes, and correspondence regarding strategic decisions and settlement options, concluding that they were protected as opinion work product. Id. Finally, the Court examined a number of emails reflecting requests for legal advice or conveying requests from attorneys for information to be used in settlement negotiations. Id. at 111. Though not protected by the work-product doctrine, the Court determined that these communications were shielded from disclosure by attorney-client privilege. Id.

         The FTC then appealed this Court's decision with respect to the financial analyses of the co-promotion agreement, the forecasting analyses regarding Barr's generic drug, and the financial analyses used to evaluate the settlement agreement. Boehringer II, 778 F.3d at 147. The D.C. Circuit affirmed the Court's finding that the co-promotion agreement was prepared “in anticipation of litigation” and agreed that the vast majority of the co-promotion materials qualified as work product, but reversed the Court's decision with respect to a small body of co-promotion documents prepared after the settlement agreement was executed - a temporal distinction which this Court failed to address. Id. at 146. The D.C. Circuit also reversed this Court's decision on the issue of whether these documents were fact or opinion work product, finding that this Court incorrectly “implied that an attorney's mere request for a document was sufficient to warrant opinion work product protection” and noting that the FTC had already demonstrated the requisite substantial need to discover the documents under the fact-work-product standard. Id. at 152, 157-58. Accordingly, the D.C. Circuit remanded the matter for further consideration of how many of the documents constituted fact work product that should be produced to the FTC. Id. at 158. The D.C. Circuit also observed that, “[t]o the extent that any such documents were withheld in whole or in part on the alternative basis of attorney-client privilege, the District Court will have to determine whether this privilege independently bars discovery.” Id.

         Following the D.C. Circuit's decision, Boehringer filed a petition for a rehearing en banc, arguing that the original three-judge panel erred in its interpretation of work-product protection. See Petition for Rehearing En Banc, Boehringer II, 778 F.3d 142 (D.C. Cir. 2015) (No. 12-5393). After the D.C. Circuit denied Boehringer's petition for a rehearing en banc, Boehringer filed a motion to stay the proceedings before the D.C. Circuit remanded the matter, arguing that the Circuit's decision created a circuit split that required Supreme Court review and that a refusal to grant a stay may result in Boehringer producing documents later determined to be protected work product. See Motion to Stay Mandate, Boehringer II, 778 F.3d 142 (D.C. Cir. 2015) (No. 12-5393). In a brief per curiam order, the Court of Appeals denied Boehringer's request for a stay. Shortly thereafter, Boehringer appealed the D.C. Circuit Court's underlying decision to the Supreme Court, arguing again that it created a circuit split, an erroneously strict standard for what constitutes opinion work product, and an erroneously lax standard for what constitutes substantial need for discovery of fact work product. See Petition for Writ of Certiorari, Boehringer Ingelheim Pharmaceuticals, Inc. v. FTC, 136 S.Ct. 925 (2016) (No. 15-560), 2015 WL 6668470. The Supreme Court denied Boehringer's petition, bringing the matter back to this Court. See Boehringer, 136 S.Ct. 925 (2016).

         C. Bo ...

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