The opinion of the court was delivered by: Bongiovanni, Magistrate Judge
This matter comes before the Court upon Plaintiffs Medeva Pharma Suisse A.G., Warner Chilcott Pharmaceuticals Inc. and Warner Chilcott Company, LLC's (collectively, "Medeva") motion to preclude Defendant Roxane Laboratories, Inc. ("Roxane") from disputing the location and duration of release of mesalamine from Roxane's generic product and Asacol in the human body. The Court has fully reviewed and considered all of the papers submitted in support of and in opposition to Medeva's motion as well as the arguments set forth by counsel during the November 23, 2010 hearing. For the reasons set forth more fully below, Medeva's motion is GRANTED in part and DENIED in part.
I. Procedural History and Background
Medeva filed the instant Hatch-Waxman patent infringement case against Roxane on October 26, 2007 after Roxane filed an Abbreviated New Drug Application ("ANDA") and Paragraph IV Certification and Notice letter seeking approval to commercially manufacture and market a generic version of Medeva's Asacol product, which is marketed under United States Patent No. 5,541,170 (the "'170 patent") to treat mild to moderate ulcerative colitis. The '170 patent is owned by Plaintiff Medeva Pharma Suisse A.G. Prior to October 30, 2009, the '170 patent was licensed exclusively to Proctor & Gamble Pharmaceuticals, Inc. ("P&G"), now known as Warner Chilcott Pharmaceuticals Inc. On October 30, 2009, Warner Chilcott Company, LLC acquired P&G. Warner Chilcott Company, LLC is now the exclusive licensee of the '170 patent. The '170 patent relates to the formulation of the active ingredient mesalamine, by which a core of mesalamine is specially coated for release to the afflicted gastrointestinal tissues. The '170 patent claims a tablet formulation of mesalamine which includes an acrylic-based resin coating that releases the entire dose of mesalamine "to the right side of the colon" so that it acts topically to relieve symptoms. The infringement issue in this matter relates to whether Roxane's proposed generic product releases its mesalamine dose in accordance with the claim. The validity issues concern whether the claimed invention would have been obvious to a person of ordinary skill in the art.
At issue in the present motion is Medeva's claim that Roxane is responsible for the spoliation of evidence. Specifically, Medeva argues that Roxane (1) destroyed highly-relevant documents concerning Roxane's product development efforts as well as its testing to determine where and when Asacol releases mesalamine and (2) manufactured a "secret batch" of its generic product in order to conduct testing in humans after persuading the Court to preclude Medeva from conducting the same kind of testing without prior Court approval. Both of these arguments as well as Roxane's opposition thereto are discussed in more detail below. As a result of the alleged spoliation, Medeva requests that sanctions be imposed. Initially, Medeva sought to preclude Roxane from disputing the location and duration of release of mesalamine from Roxane's generic product and Asacol in the human body. Medeva then expanded its request for sanctions to include additional and lesser sanctions such as the spoliation inference, reopening discovery, waiver of the attorney-client privilege and the imposition of attorney's fees and costs.
A. The Destruction of Documents
Medeva claims that Roxane impermissibly destroyed relevant documents after it anticipated litigation and was under a duty to preserve same. In this regard, Medeva argues that Roxane had a duty to preserve documents as early as July 31, 2001, which corresponds to the date of an entry on Roxane's privilege log that asserts work product protection; Medeva notes that the work product doctrine does not apply unless the document at issue was created in anticipation of litigation. Further, Medeva claims that Roxane certainly had a duty to preserve documents no later than February 2002 as the evidence establishes that Roxane knew at that time that it intended to file an ANDA with a Paragraph IV Certification regarding its generic product. Nevertheless, Medeva claims that Roxane failed to issue a document preservation notice (i.e., a litigation hold) until July 2007.
Additionally, Medeva claims that Roxane's normal document retention policies did not sufficiently protect against spoliation. Indeed, Medeva argues that Roxane's normal document retention policies confirm that Roxane breached its duty to preserve documents because they show that documents were actually destroyed in 2002 and thereafter. Further, Medeva argues that the testimony obtained in this case also confirms that Roxane had annual file clean-up days during which documents were destroyed.*fn1 Medeva therefore contends that Roxane failed to take adequate steps to prevent spoliation between July 2001 and July 2007.
Further, Medeva argues that the evidence establishes that relevant documents were actually destroyed. For example, Medeva claims that Roxane destroyed documents relating to its first pharmacokinetic study involving Asacol (the "Anapharm study"). Medeva claims that Roxane failed to produce (1) the protocol for the Anapharm study, which Roxane's Director of Regulatory and Medical Affairs testified would have shown Roxane's objectives and hypotheses for the study and which Roxane confirmed no longer exists; (2) Dr. Kramer's (Roxane's consultant) final report from the Anapharm study and (3) any subsequent correspondence regarding the study, despite the fact that Dr. Kramer sent an email to Roxane asking whether any changes regarding the study should be made. Moreover, Medeva argues that Roxane cannot shift its blame for failing to preserve documents related to the Anapharm study by arguing that Medeva could have, but did not subpoena Anapharm for the missing information. Medeva argues that Roxane had an independent responsibility to preserve the missing information.
Likewise, Medeva claims that it was not in a position to pursue discovery related to the Anapharm study because it was not listed in Roxane's Rule 26(a) disclosures, it is only referenced in a single email, Roxane's witnesses did not mention it in their testimony, Roxane did not produce its research agreement with Anapharm and Roxane would not admit that the study existed. Indeed, Medeva claims that by the time it learned of the Anapharm study, it was the fall of 2009 and fact discovery had closed. As such, Medeva claims that it did not have the opportunity to subpoena Anapharm and that even if it were granted leave to do so out of time, it did not believe that it would get a response from Anapharm in time to make use of it here.
In addition, Medeva argues that Roxane has only produced several documents in traditional paper file form and has failed to produce the corresponding electronic versions of these emails and documents. Such documents relate to analysis of pharmacokinetic studies involving Roxane's prototype formulations as well as correspondence regarding the design of Roxane's clinical study created to test the alleged clinical effectiveness of Roxane's generic product against both Asacol and a placebo. Specifically, Medeva takes issue with Roxane's production of electronic documents and emails from several "key custodians." (Medeva Reply Br. at 4). For example, Medeva claims that no emails or other electronic documents of any kind were collected from Eric Spiller, Roxane's Associate Director of Product Development and the "project leader" responsible for developing Roxane's generic product. During oral argument, Medeva clarified that it is not arguing that Roxane should have produced documents in both paper and electronic format, but instead, that the lack of electronic documents establishes that information was destroyed.
Medeva also argues that Roxane failed to produced signed final reports for studies related to Roxane's development and testing of its generic product. Medeva contends that it knows that these signed final reports exist because it obtained them from third parties, even though Roxane failed to produce same. Similarly, Medeva argues that discovery obtained from Quintiles, a contractor retained by Roxane to conduct a clinical study, supports the fact that Roxane destroyed documents. In this regard, Medeva points out that Quintiles, but not Roxane, produced a number of emails sent between Quintiles and Roxane employees between 2005 and 2006 that concerned Roxane's evaluation of U.K. Asacol as well as Roxane's representations to foreign regulatory authorities concerning the formulation characteristics of its tablets. Medeva claims that because Roxane did not suspend its routine destruction of documents, there is no way of knowing what other documents and emails were destroyed before Roxane implemented its litigation hold. Medeva also argues that what is clear form the sheer number of destroyed documents is that Roxane is liable for spoliation.
Further, Medeva contends that the destroyed documents are relevant, indeed critical, to this litigation and that it has been prejudiced by their loss. With respect to relevance, Medeva argues that the destroyed documents are relevant to (1) Roxane's efforts to develop its formulation; (2) Roxane's claims of non-infringement; and (3) Roxane's challenge to the validity of the '170 patent. Indeed, Medeva argues that the destroyed documents bear on critical issues such as whether Roxane's generic product releases mesalamine to the right side of the colon and whether Asacol releases mesalamine to the right side of the colon, a fact that Roxane has claimed is central to its defense of this matter. For example, Medeva contends that the Anapharm study, which Medeva claims evaluated the release of Asacol in the gastrointestinal tract, is obviously relevant to Roxane's allegations that Asacol is not a commercial embodiment of the '170 patent and Roxane's claims of non-infringement.
With respect to prejudice, Medeva claims that the fact that relevant evidence was destroyed establishes prejudice. Indeed, Medeva argues that all it has to show to establish prejudice is that its ability to effectively prepare a full and complete trial strategy has been impeded. Medeva argues that its ability to effectively prepare such a trial strategy has in fact been impeded because Roxane destroyed documents that concern the location of the release of mesalamine as well as Roxane's development of its generic product. Given the destruction, Medeva does not have access to the missing documentary evidence and has been prevented from questioning Roxane's witnesses regarding same. What is more, Medeva claims that the destroyed documents appear to support the conclusion that Asacol releases at the terminal ileum, as claimed by the '170 patent. Further, Medeva claims that the destruction of the aforementioned documents is prejudicial because Roxane keeps altering its position regarding the location of where its generic product releases in the body. Medeva claims that because the cite of release has been a moving target, it is prejudiced by the destruction of documents that bear on where and how Roxane designed its product to release in the gastrointestinal tract (i.e.,the types of documents that would shed the most light on Roxane's design decisions and testing of its product andAsacol).
In addition, Medeva argues that the prejudice imposed on it has been increased because, not only were relevant documents destroyed, but Roxane sought to evade discovery through deposition testimony and interrogatory responses on the subject matter contained in the destroyed documents. For example, Medeva claims that despite the fact that the FDA was interested in where Roxane's generic product releases in the body and despite the fact that Roxane made statements in documents submitted to the FDA regarding where its product releases mesalamine, Roxane refused to produce discovery regarding where its generic product releases mesalamine.*fn2
Indeed, Medeva argues that no deponent, including Roxane's Rule 30(b)(6) witness, was able to testify regarding where Roxane's generic product releases mesalamine in the gastrointestinal tract or the basis for Roxane's characterization of its generic product's release characteristics that is found in Roxane's ANDA, proposed labeling, Paragraph IV Notice letter or patent application.
In addition, Medeva claims that Roxane's supplemental answers to Medeva's interrogatories were insufficient. For example, Medeva's Interrogatory No. 11 sought details regarding the release of mesalamine from Roxane's generic product within the human gastrointestinal tract. Roxane's response pointed to its Paragraph IV Notice letter and its employee Vinay Shukla as sources of responsive information. Medeva contends that Roxane's response is insufficient because, as previously stated, Roxane's witnesses testified that Roxane had no knowledge of the factual bases for the assertions contained in Roxane's Paragraph IV Notice letter and Mr. Shukla specifically testified that he was not the expert in the in vivo area as to where Roxane's generic product releases and explicitly refused to answer questions about Roxane's Paragraph IV Notice letter that addressed Roxane's generic product's release characteristics.
Given the alleged magnitude of Roxane's misconduct, Medeva argues that the sanction of preclusion is justified even if such a sanction is tantamount to dismissal of Roxane's claim. As previously stated, Medeva argues that Roxane not only destroyed documents but sought to evade other efforts to obtain the information contained in the destroyed documents. Moreover, Medeva claims that Roxane, whose business model is to challenge the intellectual property rights of innovative drug companies, knew what it was doing when it failed to issue a timely litigation hold and destroyed relevant evidence because Roxane's. Medeva, therefore, asks the Court to sanction Roxane by precluding Roxane from disputing where its generic product releases and where Asacol releases in the human body. Medeva also argues that if the Court were to consider additional and/or lesser remedies, then the following may be be appropriate: (1) imposition of adverse inferences regarding where Roxane's generic product and Asacol release; (2) reopening of fact discovery and requiring Roxane to restore all back-up tapes from 2001 through the present; (3) finding that Roxane's conduct constitutes a waiver of work product protection from 2001 through 2007; and (4) imposition of all fees and costs associated with the instant motion to preclude as well as those incurred by Medeva's experts in testing and preparing reports on Lot No. 089226.
Roxane opposes Medeva's motion to preclude as well as its request for additional and/or lesser remedies arguing that there has been no spoliation of evidence. In the first instance, Roxane claims that no documents were actually or intentionally destroyed. Roxane argues that from June 2002 forward it had a formal document retention policy in place that required laboratory notebooks, technical reports and developmental and analytical records to be retained for 20 years. Indeed, Roxane argues that from 1998-2004, its document retention policy required Roxane to preserve technical information for at least 30 years. Further, Roxane claims that its document retention policy did not permit documents to be purged without safeguards; instead, on the file clean-up days that occurred under Roxane's document retention policies, employees paid close attention to the document retention policies to ensure that no technical information, including all such information related to mesalamine, would have been destroyed. In addition, Roxane contends that the evidence shows that no documents relating to mesalamine were destroyed. In this regard, Roxane notes that its Rule 30(b)(6) witness on document retention issues explicitly testified that any and all documents concerning mesalamine were not destroyed. Roxane also argues that the litigation hold put in place in 2007 "merely modified the ongoing document retention policy to suspend any potential destruction of documents." (Roxane Opp.Br. at 4). Roxane claims that it would be unreasonable to have required Roxane to institute a litigation hold in 2001, four years before its first ANDA product was ever manufactured. Moreover, Roxane claims that such a litigation hold would only have continued the preservation of documents already being preserved under Roxane's document retention policies.
With respect to the allegedly destroyed documents identified by Medeva, Roxane argues that the documents are not critical to this matter and also claims that Medeva has failed to show that Roxane actually and intentionally destroyed same. For example, with respect to the Anapharm study, Roxane argues that while witnesses testified that a protocol for the study must have existed, nothing in the record establishes that Roxane itself had the protocol. Further, Roxane notes that while a protocol describing how the Anapharm study would be performed was not produced, Roxane did produce other documents relating to the study, including Dr. Kramer's principal and supplemental reports, which detail how the Anapharm study was actually carried out. Moreover, Roxane claims that there is no evidence that Dr. Kramer prepared other documents related to the study or that the study results were ever memorialized in any other format.
In addition, Roxane claims that the Anapharm study is not relevant to this litigation, and certainly not of critical importance, because it does not relate to Roxane's generic product or a prototype thereof, but instead relates to Medeva's Asacol product and Roxane never asked Dr. Kramer to examine where Asacol releases mesalamine in the gastrointestinal tract. Further, Roxane argues that Medeva's conduct establishes that the Anapharm study is not important to this litigation. In this regard, Roxane notes that Medeva did not pursue discovery on this study directly from Anapharm. Roxane also notes that in its deposition of Dr. Kramer, Medeva asked almost nothing about the Anapharm study and did not even inquire into the existence of a protocol. Further, Roxane claims that despite the fact that Medeva had the results of the Anapharm study and could have had its experts analyze same, it did not.
Roxane also contends that it was not obligated to make a duplicate production of documents that were produced in the traditional paper file format. Indeed, Roxane argues that it was not required to produce both paper and electronic versions of documents and emails. Consequently, Roxane argues that the fact that certain documents and emails were only produced in paper format and were not electronically produced does not support the conclusion that these documents and emails were destroyed. In addition, with respect to Eric Spiller's files, Roxane claims that the evidence shows that Mr. Spiller maintained all of his mesalamine related documents in a specific file and that this file was produced to counsel. Indeed, Roxane argues that there is no testimony that either Mr. Spiller or any other employee ever deleted or destroyed a single document concerning mesalamine.
More importantly, Roxane claims that there is no evidence that the allegedly missing documents are important to this case. For example, Roxane argues that there is no evidence that the allegedly missing product development documents would have contained information about where either Roxane's generic product or Asacol releases. Further, Roxane notes that there could have been no such documents concerning its generic product until April 2005 because Roxane's generic product was not manufactured until that time. Similarly, Roxane claims that the allegedly missing documents concerning Roxane's prototype formulations are not relevant to this matter and would not have contained information regarding the release of either its generic product or Asacol.
Roxane also argues that the record does not support Medeva's contention that Roxane ever possessed the allegedly missing final study reports related to Roxane's development and testing of its generic product that Medeva obtained from Quintiles. Indeed, Roxane notes that Elizabeth Ernst, Roxane's Director of Regulatory Medical, testified that she did not recall ever receiving the final study reports. In addition, with respect to the remainder of the Quintiles production, Roxane claims that the "vast majority" of same is made up of raw data generated from a clinical study that was conducted in a dozen countries and which was never forwarded to Roxane. (Roxane ...