Fed. Trade Comm'n v. Boehringer Ingelheim Pharm., Inc.
| Decision Date | 27 September 2016 |
| Docket Number | Case No. 09-mc-564 (GMH) |
| Parties | Federal Trade Commission, Petitioner, v. Boehringer Ingelheim Pharmaceuticals, Inc., Respondent. |
| Court | U.S. District Court — District of Columbia |
Mark S. Hegedus, Federal Trade Commission, Washington, DC, for Petitioner.
Lawrence D. Rosenberg, Peter Biersteker, Jones Day, Washington, DC, Michael Sennett, Pamela L. Taylor, William F. Dolan, Jones Day, Chicago, IL, for Respondent.
G. MICHAEL HARVEY
This case is before the Court on remand from the Court of Appeals. The Court is tasked with deciding, consistent with the guidance from the D.C. Circuit, whether certain documents created by Boehringer Ingelheim Pharmaceuticals, Inc. and subpoenaed by the Federal Trade Commission are protected by either the work-product doctrine, the attorney-client privilege, or both. The Court has reviewed in camera all the documents at issue. Upon review, the Court concludes that most of the documents are mere fact work product and are therefore not protected from disclosure. However, Boehringer has asserted the attorney-client privilege in addition to work-product protection for almost all these documents. That privilege, and not the work-product doctrine, supplies a proper basis on which to withhold the documents.1
The relevant facts underlying these proceedings were ably described in the Court's prior opinion 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”). The Court will summarize only the important background information here. It will then describe the Court's prior ruling, the appeal to the D.C. Circuit, and the posture of the case on remand.
The FTC filed an action to enforce a subpoena duces tecum directed at Boehringer.
See Petition to Enforce Subpoena [Dkt. 1]. The FTC is investigating a settlement agreement in a prior patent lawsuit between Boehringer and a generic drug manufacturer, Barr Laboratories. Memorandum in Support of Petition to Enforce Subpoena [Dkt. 1–4] at 1–2. The FTC wants to learn whether Boehringer and Barr engaged in unfair trade practices or violated antitrust laws. Id. In the subpoena that is the subject of the instant suit, 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.
The patent litigation and settlement underlying the FTC's investigation can be briefly summarized. Boehringer manufactures the drugs Aggrenox
and Mirapex, of which Barr developed generic versions. Boehringer sued Barr for patent infringement in what is termed the “Mirapex litigation.” See Boehringer Ingelheim 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 a reversal from the Federal Circuit on appeal, the parties agreed to settle the case. See Boehringer I, 286 F.R.D. at 105. During the course of the lawsuit, Marla S. Persky was the Senior Vice President, General Counsel, and Secretary of Boehringer Ingelheim USA Corporation, Boehringer Ingelheim Corporation, and Boehringer Ingelheim Pharmaceuticals, Inc. Id. She helped advise her client on the settlement terms and surrounding agreements. Id. As will be seen, she sits at the center of this subpoena enforcement action.
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.
Of particular concern to the FTC were the following terms of their settlement: (1) Barr would not market its generics for Aggrenox and Mirapex until shortly before Boehringer's patents expired; and (2) in exchange for fees and royalties, Barr would help promote Aggrenox until Barr's generic entered the market. Boehringer II, 778 F.3d at 146. To the FTC, these terms made it appear as though Barr agreed to delay marketing its generics, giving Boehringer a monopoly on profits for a time and, in exchange, Boehringer would pay off Barr from those sales. Boehringer I, 286 F.R.D. at 105.
During the investigation, the FTC served on Boehringer a subpoena for documents. Id.
Boehringer did not comply with it. Id. The FTC filed this petition seeking enforcement of the subpoena. Id. Specifically, the FTC requested that the Court order Boehringer to comply with the subpoena and turn over all relevant documents concerning the following topics: (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. For several months, the Court oversaw the production documents responsive to the subpoena. See id. at 106.
After Boehringer reported to the Court that it had fully complied with the subpoena, the FTC objected, noting that Boehringer had withheld many documents under claims of either work-product protection or the attorney-client privilege. Id.
The FTC identified several categories of documents which Boehringer withheld under privilege claims, including: (1) the 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. Id. Further, the FTC asserted that the attorney-client privilege did not apply because the documents 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.
Boehringer, at the Court's direction, provided a sample set of documents for the Court to review in camera. Id. at 106
. That sample of 105 documents, which was submitted in camera and ex parte, is representative of the total number of documents over which Boehringer claims privilege. Id. Boehringer also submitted, in camera and ex parte, affidavits from attorney Persky and from attorney Pamela Taylor, who represents Boehringer in the FTC investigation. Id. at 109. The Court examined those documents and issued a memorandum opinion sustaining in part and overruling in part Boehringer's assertions of privilege. Id. at 108.2
The Court addressed the relevant documents by category. Id. at 108–12
. First, the Court examined the financial analyses of the co-promotion agreement, the forecasting analyses regarding Barr's generic, and financial analyses used to evaluate the settlement agreement. Id. at 108. Boehringer contended that these sorts of documents, while often prepared in the ordinary course of business (and not under threat of impending litigation), were “specially prepared at the request of [Boehringer's] counsel in response to litigation.” Id. at 108–09. In Boehringer's view, then, the documents constituted work product. Id. at 109. Moreover, Boehringer claimed that the analyses at issue were “premised on frameworks provided by Persky and were prepared for her use” and were therefore subject to the attorney-client privilege. Id.
The FTC rejoined that the co-promotion agreement regarding Aggrenox
was distinct from the settlement in the Boehringer-Barr litigation and was therefore not work product. Id. Boehringer replied that the co-promotion agreement, while “freestanding,” was negotiated during settlement and that haggling over the terms of the co-promotion agreement informed the development of the settlement agreement. Id. Because the co-promotion agreement arose during settlement negotiations, it was, in Boehringer's opinion, part of the settlement. Id.
The Court concluded that the co-promotion agreement was “an integral part of the litigation” and that “disclosure of the attorneys' and their agents' mental processes qualify for [work-product] protection since the process of deciding whether to settle a case is necessarily created because of the prospect of litigation.” Id.
The Court relied heavily on the ex parteaffidavits Boehringer submitted, in which the attorneys averred that the financial analyses were prepared during settlement discussions at the request of Boehringer attorneys who were negotiating the settlement. Id.
Further, the Court reasoned that the documents themselves confirmed attorney Persky's claims that the analyses were created at her direction. Id. The Court found that “[t]his was information she needed in order to provide her client ... with legal advice regarding the potential settlement[.]” Id. The Court held that “[i]nformation used to assess settlement option [sic] clearly falls within the ambit of the work product doctrine.” Id.(citing Willingham v. Ashcroft, 228 F.R.D. 1, 4 (D.D.C.2005) ).
The Court rejected the FTC's contention that the analyses were separate and apart from the settlement negotiations, finding that the specific reports at issue “were prepared using information and frameworks provided by [Boehringer] attorneys and constitute work product intended to aid these attorneys in the settlement process.” Id.
Moreover, because Boehringer represented to the Court that any freestanding, non-litigation-based financial analyses were previously disclosed to the FTC, “the only additional information the documents at issue would yield is the mental thought processes of [Boehringer's] attorneys as they prepared for settlement negotiations.” Id. According...
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