SmithKline Corp. v. Staats
Decision Date | 24 January 1980 |
Docket Number | Civ. A. No. 75-499. |
Citation | 483 F. Supp. 712 |
Parties | SMITHKLINE CORPORATION, Plaintiff, v. Elmer B. STAATS, Comptroller General of the United States, Defendant, and The United States of America, Intervenor-Defendant. |
Court | U.S. District Court — Eastern District of Pennsylvania |
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William S. Rawls, Philadelphia, Pa., for plaintiff.
Peter F. Vaira, U. S. Atty., Philadelphia, Pa., for defendant.
J. Roger Edgar, Dept. of Justice, Civil Division, Washington, D. C., for intervenor-defendant.
This action arises from a demand asserted by the General Accounting Office ("GAO") for access to books and records maintained by the plaintiff SmithKline Corporation ("SmithKline"). Plaintiff filed a complaint seeking declaratory and injunctive relief to bar GAO from access to the documents. The Court granted the motion of the United States to intervene as a party defendant for the purpose of asserting a counterclaim seeking declaratory and injunctive relief to compel SmithKline to comply with GAO's demand for documents. Now before the Court are plaintiff's motion for summary judgment and the government's motion for summary judgment on its counterclaim. For the reasons hereinafter set forth, the Court will grant the government's motion for summary judgment on its counterclaim and deny the plaintiff's motion for summary judgment.
In determining the propriety of granting a motion for summary judgment, the Court must consider whether there exists a genuine issue as to any material fact. Hicks v. ABT Associates, Inc., 572 F.2d 960, 967 (3d Cir. 1978); Abdallah v. Caribbean Security Agency, 557 F.2d 61, 63 (3d Cir. 1977); Scott v. Plante, 532 F.2d 939, 945 (3d Cir. 1976). On the basis of uncontroverted depositions and affidavits filed by the parties in connection with the motions for summary judgment, the Court finds that there is no genuine issue of material fact. The uncontroverted record may be summarized as follows:
The Veterans Administration ("VA") and Defense Supply Agency ("DSA") awarded certain negotiated fixed-price contracts for pharmaceutical products to SmithKline, and, in one instance, to SK&F Co., its wholly owned subsidiary. Those contracts are summarized as follows:
Veterans Administration Final Contract Number Date of Award Contract price Payment Made V797P-5835b 7/31/73 Est. $1,599,042.50 ---- V797P-5892b 10/2/73 $ 137,148.00 ---- Defense Supply Agency DSA120-74-C-0519 8/1/73 $ 105,431.74 12/26/73 DSA120-73-D-2968 4/16/73 $1,436,510.30 8/22/74 DSA120-74-C-2518 3/6/74 $ 12,058.20 8/13/74
Pursuant to 41 U.S.C. § 254(c),1 the contracts with the VA incorporated the following clause:
The same clause was included in the Defense Supply Agency contracts, pursuant to 10 U.S.C. § 2313(b), which provides:
After the hearings, Senator Nelson and his staff pursued their efforts to have GAO obtain documents from the pharmaceutical companies. On August 9, 1971, the Comptroller General asked Senator Nelson and his staff assistant, Ben Gordon, if their objectives would be served by composite, industry-wide cost data that would be representative of several companies and products, but not identifiable as to any particular company or product. Gordon responded that they preferred individual product and company data, which "should be made public."5 Gordon continued to press GAO to obtain documentation of costs from the pharmaceutical companies. (Ahart Dep., Exhibits PA-14 through PA-22). Gordon demanded on behalf of Senator Nelson that GAO seek data "through the courts, if necessary." (Id., Exhibits PA-16, PA-17). Gordon told GAO that Senator Nelson believed that GAO should seek data "without any strings attached" so that the information "could be used as needed." (Id., Exhibit PA-19). A staff assistant to Senator Edward Kennedy told GAO that individual company and product data were essential, since the "only way" that Senator Kennedy's objectives could be achieved was to "publicize specific price and cost data for individual products." (Id., Exhibit PA-27).
As a result of these communications, GAO eventually concluded that ". . . there is no viable alternative than to press the companies for access to their cost data." (Id., Exhibit PA-18).
Subsequent to a second appearance by the Comptroller General before Senator Nelson's Subcommittee on May 10, 1972, GAO began to implement a two-phase study of the economics and operations of the pharmaceutical industry. As a first step, GAO representatives met with representatives of the Pharmaceutical Manufacturers Association and its member firms.6 The first phase of the study consisted of two or three day visits to the facilities of six drug manufacturers, including SmithKline. Phase I of the study, in which the drug manufacturers voluntarily agreed to participate, was "designed to obtain for GAO an understanding of the drug manufacturing industry and to enable GAO to develop a meaningful approach for the second phase of the study." (Ahart Aff. I ¶ 6).
Following the Phase I visits, GAO prepared a proposed plan for a detailed study (Phase II). The objective of this study was "to gather and develop data necessary for GAO to present a comprehensive and objective presentation to the Congress and the involved Federal agencies concerning the salient economic and operational aspects of the drug industry." (Ahart Aff. I ¶ 8). It...
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Merck & Co., Inc. v. Staats
...620 F.2d 17 (2d Cir. 1980), aff'd by evenly divided court, --- U.S. ----, 101 S.Ct. 2037, 68 L.Ed.2d 343 (1981); SmithKline Corp. v. Staats, 483 F.Supp. 712 (E.D.Pa.1980), appeal pending No. 80-1464 (3d Cir. Mar. 19, 1980), conditional petition for certiorari before judgment denied December......
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...members of the Abbott panel, see 597 F.2d at 674 (Pell, J., concurring), 675 (Wood, J., concurring). Compare also SmithKline Corp. v. Staats, 483 F.Supp. 712 (E.D.Pa.1980) with Merck & Co., Inc. v. Staats, No. 74-1447 (D.D.C. filed Aug. 12, 1977), appeal docketed, No. 79-1435 (D.C. Cir. Apr......