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

United States District Court, D. Kansas

June 15, 2018

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


          Teresa J. James U.S. Magistrate Judge

         This matter is before the Court on Class Plaintiffs' Motion to Compel Compliance with Subpoena Directed to Non-Parties Highmark, Inc., Health Care Service Corporation, Anthem, Inc. and Anthem Insurance Companies, Inc., and Amerigroup Corporation (ECF No. 400). Class Plaintiffs seek an order requiring Non-Parties Anthem, Inc. and Anthem Insurance Companies, Inc. (collectively “Anthem”) and Amerigroup Corporation, to produce two categories of documents responsive to Plaintiffs' subpoenas served on December 11, 2017.[1] The Non-Parties oppose the motion. As set forth below, the Court will grant Plaintiffs' motion.

         I. Relevant Background

         Plaintiffs and the Non-Parties agree that following extensive conferring, the Non-Parties have produced documents responsive to the subpoenas with the exception of two categories. The Non-Parties have withheld these documents but offered to produce them if the protective order in this case were modified to specify that only outside counsel could view the documents, with certain redactions. Plaintiffs were not satisfied with those conditions and filed the instant motion. Plaintiffs and the Non-Parties represent, and the Court finds, that they have complied with the requirements of D. Kan. R. 37.2.

         II. Summary of the Parties' Arguments

         Plaintiffs argue the Non-Parties are improperly withholding relevant documents that, if produced, would be adequately protected under the terms of the existing protective order in this case.[2]

         The Non-Parties argue they should not be required to disclose the two categories of documents they have withheld, both of which concern the processes and particulars of the Non-Parties' decision-making surrounding EAI formulary inclusion, exclusion, and placement. The categories are as follows: (1) “Anthem's clinical review summaries and value assessment committee reports, which contain Anthem's internal reasoning regarding which EAI devices to place on Anthem's formularies;” and (2) “Anthem and Amerigroup spreadsheets containing their proprietary internal financial projections of the costs of offering particular EAI devices on their formularies.”[3] The Non-Parties describe the documents in these categories as highly sensitive trade secrets because they reveal the Non-Parties' financial projections, internal methodology, and decision-making process.

         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.”[4] Non-parties responding to Rule 45 subpoenas generally receive heightened protection from discovery abuses.[5]

         Federal Rule of Civil Procedure 45 governs both motions to compel compliance with and motions to quash a subpoena served on a non-party.[6] 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.”[7] 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.”[8]

         “The scope of discovery under a subpoena is the same as party discovery permitted by Fed.R.Civ.P. 26.”[9] 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.[10] Information still “need not be admissible in evidence to be discoverable.”[11] 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.[12] 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.[13] Relevancy determinations are generally made on a case-by-case basis.[14]

         Trade secrets and similar confidential information are not afforded absolute privilege.[15]However, under Federal Rule of Civil Procedure 26, for good cause shown a court may “issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, ” including that “a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way.”[16] A person seeking to resist disclosure must (1) establish that the information sought is a trade secret or other confidential research, development, or commercial information, and (2) demonstrate that its disclosure might be harmful.[17] If these requirements are met, the burden shifts to the party seeking discovery to establish that the disclosure of trade secrets is relevant and necessary to the action.[18] Finally, the court must balance the need for the trade secrets against the claim of injury resulting from disclosure.[19] If the requesting party demonstrates both relevancy and need, the trade secrets should be disclosed unless they are privileged or the subpoenas are unreasonable, oppressive, annoying, or embarrassing.[20]

         IV. Relevancy

         The Non-Parties argue that because Plaintiffs have not explained why the Non-Parties' internal projections are relevant to their antitrust claims, Plaintiffs' motion should be denied. The Court disagrees with this statement of the relative burdens. The relevancy of the requested information is readily apparent, and indeed the Non-Parties implicitly acknowledge as much in their description of the documents they are withholding. In their words, “the Non-Parties, directly, or through pharmacy benefit managers, negotiate the prices of the EAI devices with the EAI Manufacturers. The documents the Non-Parties are withholding include their internal projected costs and savings with respect to the EAI devices.”[21] Even more to the point, the Non-Parties assert the “documents disclose the Non-Parties' internal financial projections, deliberations, and strategies concerning the very EAI devices at issue in this litigation.”[22] The Court finds the requested documents are relevant to Plaintiffs' claims.

         V. The Non-Parties' Claimed Trade Secrets

         Under the applicable standard, a person seeking protection must first establish that the information sought is indeed a trade secret and that disclosure of the information could be harmful. The latter requires demonstration that disclosure “would ‘result in a clearly defined and very serious injury, ' such as showing the competitive harm that would befall it by virtue of the disclosure.”[23] To establish such injury, the person seeking protection must ...

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