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In re EpiPen (Epinephrine Injection, USP) Marketing, Sales Practices and Antitrust Litigation

United States District Court, D. Kansas

May 31, 2018

IN RE: EpiPen (Epinephrine Injection, USP) Marketing, Sales Practices and Antitrust Litigation This Document Applies to All Cases IN RE: (EpiPen Epinephrine Injection, USP) Marketing, Sales Practices and Antitrust Litigation


          Teresa J. James U.S. Magistrate Judge.

         This matter is before the Court on (1) Class Plaintiffs' Motion to Compel Compliance with Subpoena Directed to Non-Party Optum Rx, Inc. (ECF No. 198) in No. 17-md-2785-DDC-TJJ, and (2) Non-Party OptumRx, Inc.'s Motion to Quash Plaintiff's Rule 45 Subpoena (ECF No. 1) in No. 18-mc-206-DDC-TJJ. Pursuant to Fed.R.Civ.P. 45, Class Plaintiffs seek an order requiring non-party Optum Rx, Inc. (“Optum”) to search for and produce documents responsive to Plaintiffs' subpoena served on December 11, 2017. Optum opposes the motion. Also pursuant to Rule 45, Optum seeks an order quashing Class Plaintiffs' subpoena. Class Plaintiffs oppose Optum's motion. As set forth below, the Court will grant Plaintiffs' motion subject to certain limitations, and will grant in part and deny in part Optum's motion.

         I. Relevant Background

         On December 8, 2017, Plaintiffs issued a Rule 45 subpoena to Optum and served it three days later. The date specified in the Subpoena for compliance was January 9, 2018. Under Rule 45(d)(2)(b), Optum's deadline for objections was 14 days after service of the subpoena.[1] Optum neither served objections nor produced documents in accordance with the subpoena. Instead, on February 2, 2018, Optum served objections on Plaintiffs' counsel, and on February 7, 2018, Optum filed a motion to quash the subpoena in the U.S. District Court for the Central District of California.[2] On February 12, 2018, Plaintiffs filed the instant motion. Pursuant to the parties' stipulation, on March 9, 2018, Optum's motion to quash was transferred to this district.[3] The parties have engaged in extensive written and oral communication regarding the subpoena. Based on the parties' efforts, the Court finds they have complied with the requirements of D. Kan. R. 37.2.

         II. Summary of the Parties' Arguments

         The parties raise symmetrical issues and arguments in Optum's motion to quash and in Plaintiffs' motion to compel.[4] Plaintiffs contend that Optum's failure to serve written objections within 14 days of service of the subpoena waives Optum's objections, thereby warranting an order to Optum to produce documents responsive to the subpoena.

         Optum challenges service of the subpoena; objects that complying with the subpoena would impose undue burden and expense on Optum, the latter of which should be remedied by requiring Plaintiffs to pay Optum's cost of compliance; and objects to the subpoena as premature and unnecessary.[5]

         III. Legal Standard

         In issuing a subpoena, a party must “take reasonable steps to avoid imposing undue burden or expense on a person subject to the subpoena.”[6] Non-parties responding to Rule 45 subpoenas generally receive heightened protection from discovery abuses.[7]

         Federal Rule of Civil Procedure 45 governs both motions to compel compliance with and motions to quash a subpoena served on a non-party. Under Rule 45(d)(2)(B), if the entity commanded to produce documents serves written objections to the subpoena, the serving party may seek compliance by filing a motion to compel production of the documents. If the non-party wishes to challenge the subpoena, it does so by filing a motion to quash. Rule 45(d)(3) sets forth circumstances under which a court must quash or modify a subpoena, including when the subpoena “requires disclosure of privileged or other protected matter, if no exception or waiver applies, ” and when the subpoena “subjects a person to undue burden.”[8] The rule also allows a court discretion to quash or modify a subpoena that requires the disclosure of a “trade secret or other confidential research, development, or commercial information.”[9]

         “The scope of discovery under a subpoena is the same as party discovery permitted by Fed.R.Civ.P. 26.”[10] In other words, the relevancy standards set forth in Rule 26 define the permissible scope of a Rule 45 subpoena. Relevancy is to be “construed broadly to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on” any party's claim or defense.[11] Information still “need not be admissible in evidence to be discoverable.”[12] When the discovery sought appears relevant, the party resisting discovery has the burden to establish the lack of relevancy by demonstrating that the requested discovery (1) does not come within the scope of relevancy as defined under Fed.R.Civ.P. 26(b)(1), or (2) is of such marginal relevancy that the potential harm occasioned by discovery would outweigh the ordinary presumption in favor of broad disclosure.[13] Conversely, when the relevancy of the discovery request is not readily apparent on its face, the party seeking the discovery has the burden to show the relevancy of the request.[14] Relevancy determinations are generally made on a case-by-case basis.[15]

         IV. Timeliness of objections and waiver

         Optum and Plaintiffs devote many pages to describing counsel's communications after service of the subpoena but before Optum served objections. Plaintiffs do so to make their case that Optum waived its objections, while Optum seeks to avoid waiver and demonstrate improper service of the subpoena. Based on the parties' briefs and exhibits they submit for factual support, the Court finds Plaintiffs have demonstrated that they accomplished service on Optum by going first to Optum's principal executive office and then following directions received there to deliver the subpoena to another Optum facility. Once the process server arrived at the second facility (where Optum's principal counsel is located), he handed the subpoena to a woman who stated she was authorized to accept it. Optum counters that the address is not its registered address nor its corporate headquarters, and the woman who signed for receipt is not an employee of OptumRX, Inc. However, Optum does not deny the truth of the recipient's statement that she was authorized to accept service of the subpoena. It is quite plausible that someone who is not an employee of OptumRX, Inc. would be authorized to accept service on the company's behalf. Optum's brief devotes substantial space to describing its counsel's communications in response to Class Plaintiffs' subpoena served on United HealthCare Service, Inc. (“United”), Optum's parent company, implying if not suggesting that Plaintiffs' counsel should have known to ask United's counsel why Optum had not responded to the subpoena. Optum's protestations aside, the Court finds that Optum was properly served.

         However, because non-party Optum took seriously its obligations and promptly served objections once counsel learned of the subpoena, the Court will not find waiver. Instead, the Court will consider the service date to be January 30, 2018, the date on which Optum's counsel states he first learned of the existence of the subpoena. Using that date, Optum's objections were timely when filed three days later.

         V. Relevancy

         Although Optum does not object to any of the requests on the basis of relevancy, the Court finds it appropriate to examine the relevancy of the requests to afford Optum the heightened protection a non-party deserves. Construing relevancy broadly, as the standard directs, the Court finds Plaintiffs' document requests clearly encompass matters that bear on their claims in this case. Plaintiffs allege Defendants created and exploited an EpiPen monopoly by providing aggressive rebates and incentives to pharmacy benefits managers (PBM), including Optum, to exclude EpiPen competitors from drug formularies. Plaintiffs describe PBMs as the gatekeepers between drug and medical supply manufacturers on the one hand, and health insurers and patients on the other. Plaintiffs allege Mylan paid to keep other epinephrine auto-injector (EAI) competitors out, with the result being harm to the competitive process to the detriment of both competitors and consumers.

         Given Plaintiffs' allegations, the Court finds relevant the categories of requests included in Plaintiffs' subpoena. As Plaintiffs describe them, the categories are as follows:

(i) EAI-related incentives and rebates, EAI formulary placement and decisions, and attendant EAI-related incentive, consideration and cost data and EAI related budgeting, plans and forecasting (Req. Nos. 1, 4, 7, 8, 10, 13 and 14); (ii) the EAI market, and EAI competitive conditions and demand (Req. Nos. 5 and 6); (iii) EAI-related marketing and other presentation materials (Req. No. 11); (iv) and documents sufficient to identify Optum's employees and divisions with responsibility concerning EAI-related decisions (Req. No. 9). The Subpoena also seeks documents provided to any governmental entity investigating or conducting an EAI or EAI market-related inquiry (including documents concerning Mylan's misclassification of its EAI devices as non-innovator/generic drugs under Medicaid's Medical Drug Rebate Program) (Req. Nos. 2, 3 and 12).[16]

         Having found the document requests facially relevant, the Court turns to Optum's objections.

         VI. Optum's objection that the requests are overbroad and unduly burdensome

         Citing Rule 45's directive that courts must enforce the serving party's obligation to take “reasonable steps to avoid imposing undue burden or expense, ”[17] Optum argues it should be protected from responding to the subpoena. First, Optum contends the subpoena is premature because Plaintiffs may obtain the subpoenaed information during discovery between the parties to this lawsuit, thereby obviating the need for Rule 45 discovery. The Court rejects Optum's characterization of the subpoena as calling for discovery that “will likely duplicate evidence” Plaintiffs will receive from parties.[18] To the extent Plaintiffs seek Optum's internal communications and deliberations, as well as documents, agreements, and communications with non-party manufacturers, there would be no duplication. In addition, Optum is not in a position to know what other parties will produce, nor whether a particular document may differ in version or have additions or omissions when coming from two different sources. As a result, the authority Optum cites is inapposite.

         Optum's second argument is similar, suggesting it would suffer undue burden by having to respond to a subpoena that seeks information the parties to the litigation possess. Again, Optum has no way of knowing whether documents in different entities' possession are identical, nor can it know what documents other entities possess.[19] Rule 45 does not require a party to conduct party discovery before seeking information from third parties.

         Optum next argues that the subpoena is overbroad by virtue of its definitions, which it asserts “would require OptumRX to identify and search at least 500 corporate entities (including legacy entities and acquisitions for which gathering electronic information can be difficult) for vast amounts of epinephrine-related information from an eleven-year period.”[20] Optum also objects to each individual request, repeatedly stating that the requested information is more readily available from the parties to the litigation, and that the requests are overly broad, unduly burdensome, vague, ambiguous, prohibitively expense, and excessively time-consuming.[21] In addition, Optum objects that the following words and phrases are vague and ambiguous: “actual or potential demand, ” “competitive conditions, ” “understanding, ” “other data, ” “presentation(s), ” “educational material, ” “marketing material, ” “classification, ” “misclassification, ” ...

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