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Smithkline Beecham Corp. v. Ranbaxy Laboratories

February 22, 2006

SMITHKLINE BEECHAM CORP. D/B/A GLAXOSMITHKLINE, PLAINTIFF,
v.
RANBAXY LABORATORIES, LTD. AND RANBAXY PHARMACEUTICALS, INC. DEFENDANTS.



The opinion of the court was delivered by: Hughes, U.S.M.J

MEMORANDUM OPINION

This matter having come before the Court upon Motion by Defendants Ranbaxy Laboratories, LTD. and Ranbaxy Pharmaceuticals, Inc. ("Defendants") for Clarification of the Court's Scheduling Order [Docket Entry #99], returnable December 5, 2006, to determine whether or not Defendants are permitted to submit new expert reports and test results, which were commissioned after the close of discovery. Plaintiff Smithkline Beecham Corp. d/b/a Glaxosmithkline ("Plaintiff") submitted opposition to the Motion, pointing to the Court's Scheduling Order which required all fact discovery be completed by July 31, 2004 and all expert discovery be completed by April 8, 2005. The Court considered the submissions of the parties and conducted oral argument on January 30, 2006. For the reasons stated below, Defendants' Motion for Clarification of the Court's Scheduling Order to allow additional test results is denied.

I. BACKGROUND AND PROCEDURAL HISTORY

In May 2003, Plaintiff filed a Complaint against Defendants allegingwillful infringement of United States Patent No. 4,957,924 ("the '924 patent"), pursuant to 35 U.S.C. § 100 et seq. [Docket Entry #1]. On July 15, 2003, Defendants filed its answer and counterclaims [Docket Entry #24]. Shortly thereafter, on July 17, 2003, the first Scheduling Order was entered [Docket Entry #21], setting the deadlines for discovery. Over the next two years , the Court extended discovery eight (8) times (See Docket Entry #'s 27, 33, 34, 38, 52, 57, 61 and 77). By consent of the parties, expert discovery, including depositions, was to finally conclude no later than April 8, 2005.

After the end of discovery on April 8, 2005, but prior the Court's September 20, 2006 Order to replace Defendants' expert, Defendants commissioned a new independent expert report on the (hereinafter the "Seres Report"). This report contained test results on racemization, a theory put forth in Plaintiff's expert report, but not contemplated in Defendants' original expert report.

While discovery was scheduled to end no later than April 8, 2005, the Court allowed Defendants to substitute their expert and submit a new expert report after the deadline when it became apparent that Defendants' expert was incapacitated (the relevant proceedings have been filed under seal to protect the expert's reputation) (See Docket Entry #89]. However, the Court stated on the record of September 16, 2005, that any substituted expert report could not deviate from the findings in the original report by offering a new opinion. In addition, the Court also stated that any new opinions must be "essentially the same" as those offered by Defendants original expert.

As a result of the Court's order allowing an expert substitution, Defendants retained Dr. Hannessian to prepare a new report. Dr. Hannessian subsequently filed his report, expressing basically the same opinions put forth by Defendants' original expert. However, in subsequent months, and at the request of counsel, he began conducting his own tests on the issue of racemization, a theory addressed in Plaintiff's expert report, but never previously addressed by Defendants. During his deposition, Dr. Hannessian stated that he stopped his testing when he "was told by counsel that the experiment would have to be postponed or interrupted." (See Exhibit B, Deposition Transcript of Dr. Hannessian at 51-54). Dr. Hannessian stated that he did not rely on this testing when rendering the substitute expert opinion. Id. At oral argument, Defense counsel stated that testing was interrupted because they realized the additional testing may not comply with the Court's final Scheduling Order and the Order Substituting Defendants' original expert.

Thus, Defendants filed the present motion [Docket Entry #99] for a clarification of the Court's October 4, 2004 scheduling order [Docket Entry #77] to determine whether they could submit the Seres Report and whether Dr. Hannessian could continue his testing and/or submit the test results achieved thus far. Defendants claim that such tests are permissible as they would be used only to rebut the new racemization theory put forth in Plaintiff's expert report.

II. DISCUSSION

With this Motion, Defendants seek to rely on new expert reports which were commissioned after the close of discovery, by seeking a clarification of the Court's October 4, 2006 Scheduling Order. They claim that good cause exists, pursuant to Fed. R. Civ. P. 16, to allow them to do so, and that Plaintiff will not be prejudiced by such use. Plaintiff argues that the Scheduling Order does not allow for "a third round" of testing and reports, and that Defendants must be held to the deadlines set forth in that final Scheduling Order. For the reasons stated below, this Court finds that any expert reports commissioned after the close of discovery on April 8, 2005 may not be used by either party in this case.

A. Amending Scheduling Orders - Good Cause

Defendants claim that there is good cause to amend the scheduling order because it does not address the issue of impeachment evidence, which they deem their new reports constitute. Plaintiff claims that the Scheduling Order is clear and Defendants have not demonstrated good cause to deviate from that Order. For the reasons stated below, the Court finds that no good cause exists to amend the final Scheduling Order.

To amend a court's scheduling order, the moving party must demonstrate good cause. FED. R. CIV. P. 16. In the present case, Defendants commissioned additional testing on reacemization to bolster their initial expert's opinion, after conclusion of all expert discovery including depositions. Defendants then concealed those test results (Seres Report) during their various applications to the Court, seeking the Court to allow them to a substitute their initial expert due to the expert's incapacitation. Once Defendants retained a new expert, they attempted to use the Seres Report to bolster the new expert's opinion. The test results in the Seres Report, which address racemization, are clearly outside the scope of Defendants' initial Expert report. This is particularly problematic because the Order, which allowed Defendants to replace their expert, specifically stated that the new expert report should be "essentially the same" as the original expert report. In addition, the Court stated on the record, at the September 16, 2005 oral argument on Defendants' Motion to Substitute its expert, that any subsequent expert report could not deviate from the findings in the original report by offering a new opinion. That is exactly what the Seres Report does and Defendants have not demonstrated good cause which would allow the Court to permit consideration of it. In contrast, good cause might exist if Plaintiff's expert had used test results to bolster his opinion. Then, the Court might have allowed Defendants to use test results to create a level playing field. However, this is not the case.

Dr. Hannessian's report suffers from the same defects; mainly, that it was commissioned after the close of discovery, and more significantly, after the substitution of Defendants' expert, when Defendants were advised that no new opinions would be accepted. Dr. Hannessian's testing on the racemization issue occurred in late 2005, well after the April 8, 2005 discovery deadline. As with the Seres Report, Defendants cannot demonstrate good cause why the Scheduling Order should be ...


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