The opinion of the court was delivered by: Shwartz, United States Magistrate Judge
This matter comes before the Court by way of the plaintiffs' second application for sanctions pursuant to Fed. R. Civ. P. 37 based on the defendants' alleged failure to produce a Rule 30(b)(6) witness sufficiently prepared to testify about their off-label use denials. For the reasons herein, the defendants' application is granted in part and denied in part.*fn1
The parties are familiar with the facts and the Court mentions herein only those necessary to resolve this application. As the parties are aware, there are two Multidistrict Litigations (MDL) before this Court concerning drug patents and alleged antitrust activity by the patent holders. For convenience, the Court refers to and incorporates by reference previous factual and procedural recitations set forth in In re Neurontin Antitrust Litig., MDL No. 1479, Master Civ. No. 02-1390, 2009 WL 2751029 (D.N.J. Aug. 28, 2009), and In re Gabapentin Patent Litig., 648 F. Supp. 2d 641 (D.N.J. 2009). The present application concerns only the MDL entitled In re Neurontin Antitrust Litigation.
Since 1994, Warner-Lambert has marketed Neurontin, which is a tradename for the anti-epilepsy drug Gabapentin. In re Neurontin, 2009 WL 2751029, at *1. Although the FDA initially approved Neurontin only for the treatment of epilepsy, doctors have prescribed Neurontin for "off-label" uses, that is, uses other than for the treatment of epilepsy. Id. at *2. By 1998, Neurontin was used almost exclusively for such off-label uses. Id. In 2000, Pfizer bought Warner-Lambert, and both are referred to herein as "the antitrust defendants."*fn2 (See Johnson Dep. 34:18--21, June 15, 2010, ECF No. 362, Ex. A.)
The plaintiffs are direct purchasers of Neurontin who allege that the antitrust defendants engaged in an overall strategy to monopolize the market for Gabapentin by forestalling or preventing competition from generic versions of Gabapentin. In re Neurontin, 2009 WL 2751029, at *3--4. The plaintiffs allege, in part, that the antitrust defendants engaged in anticompetitive activity through patent prosecutions, official patent listings, and infringement litigation. Id. at *4--6. The plaintiffs also allege that the antitrust defendants marketed Neurontin for off-label uses and fraudulently stated unapproved uses for the drug in official drug listings to support its patent litigation efforts to delay the market entry of generic drugs. Id. at *2, 5, 6.
On March 26, 2002, the plaintiffs filed their Complaint against the antitrust defendants embodying these allegations. On August 15, 2002, the Judicial Panel on Multidistrict Litigation transferred all related antitrust actions to this District for coordinated and consolidated pretrial proceedings. In re Neurontin Antitrust Litig., 217 F. Supp. 2d 1380 (J.P.M.L. 2002). On October 23, 2002, the District Court stayed the antitrust MDL until the resolution of summary judgment motions in the related patent MDL. (Order, Oct. 23, 2002, ECF No. 257.)
While In re Gabapentin proceeded and In re Neurontin was stayed, on May 13, 2004, a criminal information was filed against the antitrust defendants in United States v. Warner-Lambert Co., Crim. No. 04-10150 (D. Mass. 2004). (Information, May 13, 2004, ECF No. 365, Ex. 5.) The information alleged that the antitrust defendants illegally marketed Neurontin for off-label uses. (Information 19--36.) On June 7, 2004, the antitrust defendants pled guilty to the crime charged in the May 13, 2004 information. (See Johnson Dep. 35:5--12.)
From 2005 to 2007, partial summary judgment was granted and appeals were pursued in the Federal Circuit in In re Gabapentin, while stays and limited discovery occurred in In re Neurontin. On June 26, 2007, the Court stayed In re Neurontin until the Federal Circuit resolved the In re Gabapentin appeal (Order, June 26, 2007, ECF No. 55), which occurred on September 21, 2007. In re Gabapentin, 503 F.3d 1254 (Fed. Cir. 2007).
On January 10, 2008, the Court set an April 1, 2008 deadline for the antitrust defendants to answer, move, or otherwise respond to the plaintiffs' Amended Complaint. (Order, Jan. 10, 2008, ECF Nos. 60, 61.) On February 27, 2008, the Court lifted all stays, affirmed the April 1, 2008 deadline, announced that no bifurcated or staged discovery would occur, and set a pretrial schedule. (Order, Feb. 27, 2008, ECF No. 77.) On April 1, 2008, the antitrust defendants filed motions to dismiss in In re Neurontin. (Motion to Dismiss, April 1, 2008, ECF No. 89; Motion to Dismiss, April 1, 2008, ECF No. 90.) Discovery proceeded while the motions were pending. On April 2, 2009, one motion to dismiss was terminated as moot, and on August 28, 2009, the Court denied the other motion to dismiss. (Order Apr. 2, 2009, ECF No. 178; Order, Aug. 28, 2009, ECF No. 216.) On September 14, 2009, the Court set an October 29, 2009 deadline for the antitrust defendants to file answers to the Amended Complaints in In re Neurontin. (Order, In re Gabapentin, Sept. 14, 2009, ECF No. 694), and later extended that deadline to November 3, 2009. (See Order, Oct. 27, 2009, ECF No. 365, Ex. 4; Order, In re Gabapentin, Oct. 27, 2009, ECF No. 703.) In their November 3, 2009 Answers, the antitrust defendants denied promoting Neurontin for off-label uses. (See Answer, Nov. 3, 2009, ECF No. 238; Answer, Nov. 3, 2009, ECF No. 239.)
On October 1, 2009, the antitrust defendants moved for the pro hac vice admission of counsel from Skadden, Arps, Slate, Meagher & Flom LLP (hereinafter "PHV counsel"). (Motion, Oct. 1, 2009, ECF No. 231.) Among the certified statements made to the Court, PHV counsel stated that they would be "bound by the jurisdiction of the Court" (id.), and local counsel stated that they would be responsible for the conduct of PHV counsel. (Motion Supplement, Oct. 1, 2009, ECF No. 233.) On November 18, 2009, the Court granted the antitrust defendants' motion for admission of PHV counsel and ordered that PHV counsel "abide by all rules of this Court, including all disciplinary rules." (Order, Nov. 18, 2009, ECF No. 245.)
2. The Last Seven Months of Discovery; Pleading Extensions and Deadlines
On June 5, 2009, the Court directed the parties to appear for a hearing regarding disputes concerning the scope of Rule 30(b)(6) depositions and other case management issues. (Order, June 5, 2009, ECF No. 194.) On June 19, 2009, the Court amended the pretrial schedule and set December 14, 2009 as the deadline for the close of fact discovery. (Order, June 19, 2009, ECF No. 196.) On July 28, 2009, the Court directed counsel to identify the dates reserved for depositions in these cases to ensure that they would be completed by the discovery deadline and further ordered that counsel submit monthly updates setting forth the status of every deposition. (Order, July 28, 2009, ECF No. 210.)
The parties filed deposition status reports on September 9, 2009, October 7, 2009, and November 5, 2009. (Dep. Status Report, Sept. 2, 2009, ECF No. 219; Dep. Status Report, Oct. 7, 2009, ECF No. 232; Dep. Status Report, Nov. 5, 2009, ECF No. 240.) In each one, the antitrust defendants failed to list deponents who would address "Rule 30(b)(6)" topics. (Dep. Status Report, Sep. 2, 2009; Dep. Status Report, Oct. 7, 2009; Dep. Status Report, Nov. 5, 2009.) In the November 5, 2009 report, the parties stated in a footnote that several disputes existed regarding the Rule 30(b)(6) notices served on the antitrust defendants. (Dep. Status Report 11 n.2, Nov. 5, 2009.)
On December 4, 2009, the Court issued an Order resolving certain discovery disputes and set a December 8, 2009 deadline for a joint-submission concerning the Rule 30(b)(6) disputes. (Order, Dec. 4, 2009, ECF No. 257.) On December 10, 2009, the Court considered the Rule 30(b)(6) disputes and ordered the antitrust defendants to produce a Rule 30(b)(6) witness to testify about "off-label marketing [of the product] for neurodegenerative diseases and the factual basis for the off-label uses denials in its Answer." (Order, Dec. 10, 2009, ECF No. 264.)
3. First Rule 30(b)(6) Deposition
On March 17, 2010, the antitrust defendants produced James Gibney as a Rule 30(b)(6) witness to purportedly testify about the topics identified in the December 10, 2009 Order. Gibney repeatedly stated that he assumed that outside counsel and either in-house legal counsel or the company assessed the allegations and prepared the Answers. (Gibney Dep. 22:4--22:19; 22:15--18, 45:6--9, 49:8--10, 49:13--16, 50:7--10, 52:2--5, 53:3--8, 54:9--12, 58:11--14, 59:9--12, 60:8--11, 61:18--23, 64:18--21, 67:3--7, 78:4--8, 79:19--21, 81:4--7, 88:17--20, 89:16--18, 91:14--19, 92:25--93:3, 95:3--6, 98:3--7, 99:19--23, 102:1--12, 105:9--11, 118:16--18, 119:13--14, 147:2--8, 148:12--16, 150:9--16, 152:11--22, 153:2--6, Mar. 17, 2010, ECF No. 312.) Gibney could not describe the assessment (see, e.g., id. at 58:20--24, 62:5--10, 99:24--100:2, 113:2--6) or who was involved (see, e.g., id. at 114:16--116:2), and repeatedly stated that he had no knowledge of the factual basis for the denials. (See, e.g., id. at 89:19--24, 93:4--7, 105:12--14.) Gibney also had no knowledge of who at the antitrust defendants had made the decision to admit or deny the allegations in the Complaint. (id. at 114:13--115:10.) Gibney stated that PHV Counsel prepared him for the deposition and stated that the only contact he had with Pfizer/Warner-Lambert employees was a brief phone call asking for his participation as a Rule 30(b)(6) witness. (Id. at 18:25--19:10, see also id. at 153:2--20, 156:21--157:21.) Moreover, PHV counsel made a number of questionable objections and made statements not permitted under Fed. R. Civ. P. 30.*fn3 Among other things, on two occasions, PHV counsel improperly interjected information while plaintiffs' counsel was asking questions. For example, each time the plaintiffs' counsel began to ask about the assessment of the allegations done by the attorneys, PHV Counsel added the words "and the company" before the question was finished. (Gibney Dep. 52:11--14, 53:20--25.)
On April 5, 2010, the plaintiffs requested sanctions against the antitrust defendants for their failure to produce a witness who could provide the factual bases for their denials of off-label uses. (See Op. Tr. 2:3-7, Apr. 15, 2010, ECF No. 324.) The Court found that the antitrust defendants intentionally failed to produce a suitable Rule 30(b)(6) witness regarding the denials of off-label uses in the Answers.*fn4 The Court further found that the antitrust defendants did this as part of a non-responsive litigation tactic. (Id. at 13:20--24.) By its April 15, 2010 Order, the Court denied the plaintiffs' request for specific, potentially claim dispositive, sanctions but ordered the antitrust defendants to provide a suitable Rule 30(b)(6) witness who could "provide the factual basis and explanation as to how the denials in [their] Answer[s] regarding off-label uses and the marketing of the product for off-label uses is consistent with its public actions, including but not limited to its guilty plea and marketing activity." (Order, Apr. 15, 2010, ECF No. 318.) The Court also ordered the antitrust defendants to pay the plaintiffs' attorneys fees and costs for the March 17, 2010 deposition and for the new Rule 30(b)(6) deposition. (Order, May 7, 2010, ECF No. 333.) On May 7, 2010, the Court denied the request for reconsideration of its April 15, 2010 Order. (Id.)
4. Second Rule 30(b)(6) Deposition
On May 11, 2010, the Court extended the deadline for the antitrust defendants to produce the second Rule 30(b)(6) witness based on representations that they were not seeking a tactical advantage and that their witness, Rady Johnson, had scheduling conflicts. (Order, May 11, 2010, ECF No. 337.) Although the Court later questioned the reasons for the request,*fn5 (see Op. Tr. 12:11--13:11, Aug. 19, 2010), the witness has since provided a declaration describing the various scheduling issues present at the time of thethen-scheduledMay 12, 2010deposition.*fn6 (See Johnson Decl. ¶¶ 3--4, Aug. 24. 2010, ECF No. 378.) The Court ordered that the deposition be completed by June 16, 2010, and that the antitrust defendants submit a letter setting forth the date and providing the name of the Rule 30(b)(6) witness. (Order, May 11, 2010.) On May 13, 2010, the Court entered Pfizer's letter as an Order setting June 15, 2010 as the court-ordered date for Johnson to appear for the Rule 30(b)(6) deposition. (Order, May 13, 2010, ECF No. 341.) The deposition occurred as scheduled on June 15, 2010. (Johnson Dep. 1, 2.) During the deposition, PHV counsel produced an outline he wrote for the witness to use during the deposition.
Nine days later, specifically on June 24, 2010, the antitrust
defendants filed a letter requesting leave to file a motion to Amend
their Answers to modify their denials of off-label uses.*fn7
(Defs.' Letter, June 24, 2010, ECF No. 351.) At about the
same time, on June 25, 2010, the plaintiffs renewed their request for
sanctions based upon their view that the antitrust defendants did not
produce a Rule 30(b)(6) witness as required by Fed. R. Civ. P.
30(b)(6) and the April 15, 2010 Order. (See Pls.' Letter, June 25,
2010, ECF No. 352.)On June 30, 2010, the Court conducted a telephone
conference with the parties. (Tr. of Tel. Conf., June 30, 2010, ECF
No. 367.) Among other things, the Court set dates for the parties to
contribute their portions of a joint discovery dispute submission
concerning the plaintiffs' request for sanctions. (Order, June 30,
2010, ECF No. 357.) On July 8, 2010, the parties filed the present
joint discovery dispute letter. (Joint Letter, July 8, 2010, ECF No.
The plaintiffs contend that the antitrust defendants violated Rule 30(b)(6) and the Court's prior orders. Specifically, the plaintiffs argue that: (1) Rady Johnson was not an adequate Rule 30(b)(6) witness; (2) Johnson's reliance on the outline prepared by counsel rendered the deposition a charade; (3) the outline creates a waiver of the antitrust defendants' attorney-client privilege or work product protection; (4) the antitrust defendants' improperly limited the scope of their denials to the conduct described in the criminal information; and (5) their Answers to the Complaint violate Fed. R. Civ. P. 8(b)(4) and Fed. R. Civ. P. 11(b)(4). (Joint Letter, July 8, 2010 at 4--13.) The plaintiffs request that the Court, pursuant to Rule 37, either: (A) strike the denials of off-label uses, deem the off-label uses to be established for all purposes in this case, prohibit the antitrust defendants from presenting any evidence or making arguments contrary to their denials, and order any such other relief deemed just and appropriate; or (B) permit the plaintiffs to depose both the antitrust defendants' antitrust counsel, who prepared the Answers, and their criminal defense counsel, who represented the antitrust defendants during the criminal investigation and plea. (Id. at 13--14.)
The antitrust defendants argue that they fully complied with the Court's orders and Rule 37(b) sanctions are inappropriate because: (1) Johnson was a particularly well-suited and fully prepared witness; (2) Johnson need not have personal knowledge; (3) it was appropriate for him to use an outline prepared by defense counsel that sets forth the factual bases of the denials because (a) the denials were based on facts derived from other legal proceedings, (b) defense counsel may conduct the antitrust defendants' investigation and educate Johnson as the corporate witness, and (c) Johnson thoroughly reviewed the facts marshaled by counsel and could provide the antitrust defendants' position on the denials; (4) such an outline does not waive work product protection; (5) defense counsel should not be designated as witnesses because (a) the factual basis for the denials is intertwined with counsel's work product, (b) non-attorneys can be designated as Rule 30(b)(6) witnesses even where only attorneys have knowledge of the deposition topics, and (c) the plaintiffs would not or could not learn any more from Johnson than they did had they asked probing questions of him; and (6) the plaintiffs cannot satisfy the factors stated in Poulis v. State Farm Fire & Cas. Co., 747 F.2d 863 (3d Cir. 1984), to obtain dispositive relief. (Joint Letter, 15--32, July 8, 2010.) Furthermore, the antitrust defendants argue that, to the extent that the plaintiffs seek sanctions based on Rule 8(b): (1) the plaintiffs have ignored the procedural requirements of Rule 11, (2) a sanction based on Rule 8(b)(4) is not appropriate, (3) the antitrust defendants had adequate factual support under Rule 11(b)(5) for their denials, and (4) Rule 11(b)(4) may not be invoked to resolve legal and factual disputes. (Id. at 32--39.)
In the Third Circuit, courts apply a two-step process and consider several factors when asked to impose sanctions. Republic of the Philippines v. Westinghouse Elec. Corp., 43 F.3d 65, 74 (3d Cir. 1995). Under the first step, "the court must consider the conduct at issue and explain why the conduct warrants sanction." Id. The considerations under this step include: (1) whether "an attorney, rather than the client, is at fault"; (2) whether "a pattern of wrongdoing" or "grave wrongdoing" exists; (3) whether prejudice has already occurred or has been avoided in time; and(4) whether any mitigating factors exist. Id.; see also Poulis,747 F.2d at 868 (3d Cir. 1984) (considering the following factors when asked to dismiss case for discovery violations: "(1) the extent of the party's personal responsibility; (2) the prejudice to the adversary caused by the failure to meet scheduling orders and respond to discovery; (3) a history of dilatoriness; (4) whether the conduct of the party or the attorney was willful or in bad faith; (5) the effectiveness of sanctions other than dismissal, which entails an analysis of alternative sanctions; and (6) the meritoriousness of the claim or defense") (emphasis in original).
Under the second step, "the district court must specifically consider the range of permissible sanctions and explain why less severe alternatives to the sanction imposed are inadequate or inappropriate." Republic, 43 F.3d at 74. A basic tenet is "that sanctions should always be narrowly tailored to meet the misconduct, and should entail no greater punishment than is reasonably necessary to address the specific wrongdoing that confronts the court." Bartos v. Pennsylvania, Civ. No. 08-366, 2010 WL 1816674, at *6 (M.D. Pa. May 5, 2010) (citing Klein v. Stahl, GMHB & Co. Maschinefabrik, 185 F.3d 98 (3d Cir. 1999)).
Here, the plaintiffs seek sanctions under Rule 37 for the antitrust
defendants' allegedfailure to comply with Rule 30 and the Court's orders.*fn8
(See Joint Dispute Letter 13--14, July 8, 2010.) Thus, the
Court will consider whether the ...