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In Re Neurontin Antitrust Litigation

June 9, 2011

IN RE NEURONTIN ANTITRUST LITIGATION


The opinion of the court was delivered by: Hon. Faith S. Hochberg, U.S.D.J.

NOT FOR PUBLICATION

OPINION & ORDER

HOCHBERG, District Judge.

This matter comes before the Court on Defendants' Pfizer Inc. and Warner-Lambert Company LLC Appeal of Magistrate Judge Shwartz's January 24, 2011 Order and Opinion. The Court has reviewed the parties' submissions pursuant to Federal Rule of Civil Procedure78.

BACKGROUND

Plaintiffs in the instant action each directly purchased Neurontin, a brand-name version of the drug compound gabapentin anhydrous from Defendants Pfizer, Inc. and Warner-Lambert Company, LLC. In their Amended Complaint, Plaintiffs allege that Warner-Lambert engaged in an overarching anti-competitive scheme to acquire and maintain monopoly power in the market for gabapentin products in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2.*fn1 Plaintiffs claim that these actions were designed to, and did, in fact, delay the entry of generic gabapentin into the market until late 2004. Plaintiffs allege that but for Warner-Lambert's anti-competitive scheme, generic manufacturers would have entered the market at lower prices as early as 2000. As a result of this delayed entry, Plaintiffs contend that they and other direct purchasers of Neurontin were foreclosed from the opportunity of purchasing lower-priced generic versions of the drug for years, and were accordingly compelled to pay non-competitive prices for gabapentin.

I. PROCEDURAL HISTORY

This case was filed on March 26, 2002. On August 15, 2002, the Judicial Panel on Multi-District Litigation transferred all related antitrust actions to this District. On October 23, 2002, this MDL was stayed pending resolution of the summary judgment motions in In re Gabapentin Patent Litigation, (00-2931) (FSH) (D.N.J.).

On May 13, 2004, a criminal information was filed against Pfizer in United States v.Warner-Lambert Co., Crim. No. 04-10150 (D. Mass. 2004). On June 7, 2004, Pfizer pled guilty to illegal marketing of Neurontin for off-label uses.

On February 27, 2008 -- following the remand of In re Gabapentin Patent Litigation by the Federal Circuit -- this Court lifted all stays and affirmed the previously established April 1, 2008 deadline for Defendants to answer, move or otherwise respond to the Amended Complaint. Defendants filed motions to dismiss, the first of which was terminated as moot on April 2, 2009 and the second of which was denied on August 28, 2009.

On November 3, 2009, Defendants filed their Answers, in which they denied promoting Neurontin for off-label uses.

A. Disputes About Rule 30(b)(6) Witnesses On December 10, 2009, Magistrate Judge Shwartz ordered Defendants to produce a Rule 30(b)(6)*fn2 witness "to testify about off-label marketing for neurodegenerative diseases and and the factual basis for the off-label uses denials in its Answer."*fn3

In response to Judge Shwartz's order, Defendants produced James Gibney as Pfizer's Rule 30(b)(6) witness, and he was deposed on March 17, 2010.

On April 5, 2010, Plaintiffs moved for sanctions to be imposed against Defendants based on Gibney's failure to provide the factual bases for Defendants' denials of off-label uses.

In considering Plaintiffs' motion, Judge Shwartz found that Defendants had failed to produce a suitable Rule 30(b)(6) witness who could testify as to the off-label use issues in Defendants' Answers as part of "a litigation technique...that led to non-responsiveness."*fn4 In her April 15, 2010 Order, Judge Shwartz directed Defendants to: (1) pay the plaintiffs' attorneys' fees and costs for the March 17, 2010 deposition and the April 5, 2010 submission; and (2) produce a Rule 30(b)(6) witness to provide facts upon which it has denied off label uses. This witness shall also be prepared to provide the factual basis and explanation as to how the denials in its Answer 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. The defendant shall pay the plaintiffs' attorneys fees and costs attending and conducting the deposition no later than fourteen days after the date of the deposition. Failure to produce a Rule 30(b)(6) witness prepared to testify as directed herein and in the Order dated December 10, 20[09] may result in the imposition of the sanctions that plaintiffs requested in the April 5, 2010 submission.

Dkt. No. 318. On May 17, 2010, Judge Shwartz denied Defendants' motion for reconsideration of the April 15, 2010 Order.

B. Deposition of Rady Johnson

Defendants next produced Rady Johnson, chief counsel of Pfizer's Specialty Care Unit, as the corporate designee for the purposes outlined in Judge Shwartz's Order, and Johnson was deposed on June 15, 2010.

At his deposition, Johnson testified that he was not involved in the preparation of the Answers, nor was he aware of any other Pfizer employees who were involved in the preparation of the Answers. Johnson Dep. Tr. 28:12-28:17.

Throughout the deposition, Johnson relied upon an outline prepared by defense counsel, Skadden, Arps, Slate, Meagher & Flom.*fn5 ("PHV Counsel") See Johnson Dep. Tr. 51:11-51:14.

The outline, entitled "Factual Bases for the Denials Relating to Off-Label Allegations," is a 46 page document which identifies various factual allegations in the Complaint and lists in numbered paragraphs statements and citations purporting ...


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