Eli Lilly & Co v. Gottstein
| Decision Date | 12 August 2010 |
| Docket Number | Docket No. 07-1107-cv. |
| Citation | 617 F.3d 186 |
| Parties | ELI LILLY & CO., Movant-Appellee,v.James B. GOTTSTEIN, Respondent-Appellant,Vera Sharav, Alliance for Human Research Protection, John Doe, David S. Egilman, Laura Ziegler, Mindfreedom International, Judi Chamberlin, Robert Whitaker, Terri Gottstein, Jerry Winchester, Dr. Peter Breggin, Dr. Grace Jackson, Dr. David Cohen, Bruce Whittington, Dr. Stephen Kruszewski, Will Hall, David Oaks And Eric Whalen, Respondents. |
| Court | U.S. Court of Appeals — Second Circuit |
COPYRIGHT MATERIAL OMITTED
Steven Brock (Leslie R. Bennett, Berkman, Henoch, Peterson & Peddy, P.C., Garden City, NY, D. John McKay, Anchorage AK, on the brief), Berkman, Henoch, Peterson & Peddy, P.C., Garden City, NY.
Nina M. Gussack, (Sean P. Fahey, Paul V. Avelar, Pepper Hamilton, LLP, Philadelphia, PA, Samuel J. Abate Jr., Pepper Hamilton LLP, New York, NY, on the brief), Pepper Hamilton, LLP, Philadelphia, PA.
The present appeal arises from the flouting of a protective order entered in high-stakes litigation concerning Eli Lilly Co.'s anti-psychotic drug, Zyprexa. David S. Egilman, a plaintiff's expert witness and signatory to the protective order, received confidential documents produced by Eli Lilly. Finding much to dislike in the content of those documents, Egilman wished to distribute them to the media. Not wanting to release the documents to the public in a manner brazenly in disregard of the protective order, he needed a suitably minded individual to act as his partner and to subpoena those documents. Egilman contacted New York Times reporter Alex Berenson, who put him in touch with Alaska attorney and mental-health advocate James B. Gottstein, who readily agreed to help. Gottstein, who was not a signatory to the protective order, intervened in an unrelated Alaskan guardianship case, which he used to generate subpoenas purporting to require Egilman to produce all documents in his possession pertaining to Zyprexa. Failing to abide by the terms of the protective order, Egilman distributed a large volume of documents to Gottstein, who in turn copied and forwarded them to a variety of other interested parties. The next day, the Times began a series of front-page articles based on the information contained in those documents.
Understandably alarmed, Eli Lilly applied for and received a series of orders culminating in an injunction, which barred Gottstein from disseminating the documents and required their return. In re Zyprexa Injunction, 474 F.Supp.2d 385 (E.D.N.Y.2007). Gottstein now appeals that injunction, claiming that the district court erred in finding that his issuing subpoenas was part of a sham proceeding, that he aided and abetted the violation of the protective order, that the documents at issue were confidential, that the court could bind him under the protective order and that the court possessed personal jurisdiction to issue the injunction against him. We affirm the judgment of the district court in all respects.
Approximately twenty-million schizophrenia patients have taken the anti-psychotic drug Zyprexa, which some allege has produced negative side effects purportedly known to, but not disclosed by, the drug's manufacturer, Eli Lilly Co. Some 30,000 lawsuits ensued, which were consolidated pursuant to 28 U.S.C. § 1407 and assigned to the Honorable Jack B. Weinstein of the United States District Court for the Eastern District of New York. In re Zyprexa Prods. Liab. Litig., 314 F.Supp.2d 1380 (J.P.M.L.2004). That court entered a protective order, Case Management Order 3 (CMO-3), which facilitated litigants' sharing of confidential discovery. In re Zyprexa Prods. Liab. Litig., No. 04-MD-1596, 2004 WL 3520247 (E.D.N.Y. Aug. 9, 2004). Among other things, CMO-3 allowed attorneys to share confidential documents with experts, required experts to sign an “Endorsement of Protective Order” and provided a mechanism to dispute whether a document marked confidential had been correctly designated. The protective order contemplated another court's subpoenaing produced materials, but required that the designee of the subpoena notify the producing party in writing prior to the production of confidential materials and allow it a reasonable opportunity to object.
At some point during the litigation, one of the plaintiffs' firms, The Lanier Law Firm, retained Dr. David Egilman as a potential expert witness. Having first attempted to modify it, Egilman signed the Endorsement of Protective Order.1 The firm sent myriad documents produced by Eli Lilly to Egilman so that he could begin preparing his expert testimony. Egilman ultimately received some half-a-million documents and became quite determined to share their contents with the media. He contacted New York Times reporter Alex Berenson and explained his interest. Egilman understood that he was subject to CMO-3, however, and thus required an accomplice to subpoena the documents. Berenson put Egilman in touch with James B. Gottstein for that very purpose.
Gottstein is an Alaskan attorney and an advocate for patients' rights. After talking to Egilman about Eli Lilly's confidential documents and their mutual desire to see those materials disseminated to the public, Gottstein intervened in an unrelated case in which the Alaskan Office of Public Advocacy had been granted guardianship and the right to make treatment decisions for a patient, William Bigley. At that time, Gottstein had no idea if the patient had taken Zyprexa or if the state would use Zyprexa in its treatment of the patient. Yet within hours of intervening, he issued a subpoena that purported to compel Egilman to produce all documents in his possession relating to that particular drug. Despite being addressed to Egilman in Massachusetts, however, the subpoena issued from the Superior Court for the State of Alaska. Gottstein placed the request for documents pertaining to Zyprexa in the middle of requests for documents relating to 14 other drugs, none of which he expected Egilman to possess. The subpoena, issued on December 6, 2006, called for production of the material by December 20.
In an effort to comply, however perfunctorily, with CMO-3, Egilman faxed a note and copy of the subpoena to Eli Lilly's corporate general counsel. He did not, however, inform the firm that retained him of the subpoena; nor did he apprise Eli Lilly's litigation counsel. Nevertheless, the fax was routed internally and, on December 13, the Lanier Law Firm told Egilman not to produce any documents until Eli Lilly's planned motion to quash the subpoena had been ruled upon in the Alaskan court. Unbeknownst to Lanier and Eli Lilly, however, Egilman had already begun to distribute a plethora of documents to Gottstein the day before.
This clandestine production of Eli Lilly's documents resulted from Gottstein's having served an amended subpoena on December 11, which called for the production of the documents prior to the date and time set for the deposition. This subpoena again purporting to bind Egilman in Massachusetts, also issued from the Superior Court for the State of Alaska. In violation of the protective order, Egilman informed no one of this second subpoena and began transmitting documents electronically to Gottstein on December 12. Gottstein immediately disseminated the documents to a number of associates.
Realizing the magnitude of the information breach, Eli Lilly took the matter to the Special Master for Discovery, Peter H. Woodin, who ordered Gottstein and Egilman to return all material immediately. Gottstein refused to acknowledge the Special Master's authority over him, so Eli Lilly took the matter up with Magistrate Judge Roanne L. Mann, who determined that Gottstein had aided and abetted a breach of CMO-3. Eli Lilly then took the matter to District Judge Brian M. Cogan, who was sitting as a miscellaneous-duty judge and who issued a temporary injunction. The MDL court extended Judge Cogan's injunction pending a full hearing on the matter, which it conducted on January 16 and 17, 2007. The MDL court issued an injunction on February 13, from which Gottstein now appeals.
Gottstein challenges the district court's factual determination that the subpoenas he caused to be served on Egilman were a “pretense.” He also contests the district court's closely related finding that he aided and abetted the violation of CMO-3.2 We review such factual conclusions for abuse of discretion, “which may be found where the Court, in issuing the injunction, relied on clearly erroneous findings of fact or an error of law.” Knox v. Salinas, 193 F.3d 123, 129 (2d Cir.1999); see also In re Complaint of Messina, 574 F.3d 119, 128 (2d Cir.2009) () (internal quotation marks omitted).
The district court's finding that Gottstein conspired with Egilman to violate CMO-3 is amply supported by the record. Egilman called Gottstein on November 28, 2006, explaining that he possessed secret Zyprexa documents produced through litigation and that they “contained some alarming things in them.” He informed Gottstein that the documents were under a protective order. 3 Understanding that Egilman would not produce the Zyprexa documents except pursuant to a subpoena, Gottstein needed to find an appropriate case as a vehicle with which to generate one. Gottstein obtained Egilman's contact information for the subpoena, as well as the latter's email and phone number. Egilman knew that Gottstein intended to distribute the Zyprexa documents when he obtained them.
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