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United States ex rel. Simpson v. Bayer Corp.

United States District Court, D. New Jersey

June 2, 2019

UNITED STATES OF AMERICA ex rel. LAURIE SIMPSON, Plaintiff,
v.
BAYER CORPORATION, et al., Defendants.

          ORDER AND OPINION OF THE SPECIAL MASTER

          DENNIS M. CAVANAUGH, U.S.D J.

         This matter comes before the Special Master on submissions dated January 18, 2019, by plaintiff Realtor Laurie Simpson ("Realtor") and defendant Bayer Corporation ("Bayer") regarding various discovery disputes between the parties. After considering the submissions of the parties, based upon the following, it is the opinion of the Special Master that Realtor's and Bayer's requests are DENIED in part and GRANTED in part.

         DISCUSSION

         I. Discovery Standard

         Federal Rule of Civil Procedure 26 governs the scope of discovery in federal litigation. Federal Rule of Civil Procedure 26(b)(1) provides that:

Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in corfrroversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.

         The party seeking to compel discovery bears the initial burden of establishing the relevance of the information. Caver v. City of Trenton, 192 F.R.D. 154, 159 (D.N.J. 2000). Relevance has been construed liberally under Rule 26(b)(1), to "encompass any matter that bears on, or that reasonably could lead to other matter[s] that could bear on, any issue that is or may be in the case." Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978). While relevant information need not be admissible at trial in order to grant disclosure, the burden remains on the party seeking discovery to "show that the information sought is relevant to the subject matter of the action and may lead to admissible evidence." Caver v. City of Trenton, 192 F.R.D. 154, 159 (D.N.J. 2000).

         "While broad, the scope of discovery is not boundless" and courts will not permit parties to engage in fishing expeditions. Plastipak Packaging, Inc. v. DePasquale, 363 Fed.Appx. 188, 192 (3d Cir. 2010) (concluding "we discourage 'fishing expeditions'"); Unicasa Mktg. Grp., LLC v. Spinelli, No. 04-4173, 2007 WL 2363158, at *2 (D.N.J. Aug. 15, 2007). The Federal Rules also provide that a Court "must limit the frequency or extent of discovery otherwise allowed" if it concludes that: (1) the discovery sought is cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive; (2) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or (3) the burden or expense of the proposed discovery outweighs its likely benefit. Fed. R. Civ. P. 26(b)(2)(C). Further, "the Court has a responsibility to protect privacy and confidentiality interests" and "has authority to fashion a set of limitations that allow as much relevant material to be discovered as possible ... while preventing unnecessary intrusions into legitimate interests that may be harmed by the discovery of material sought." Schmulovich v. 1161 Rt. 9LLC, Civ. No. 07-597, 2007 WL 2362598, at *1-2 (D.N.J. Aug. 15, 2007).

         II. DISCOVERY ISSUES RAISED BY REALTOR

         Realtor seeks an order requiring Bayer to: (1) locate and search a litigation archive made for preserving subsequently deleted data; (2) produce information about incentive compensation for employees who participated in selling and marketing Trasylol and Avelox; (3) produce data reflecting sales of Trasylol and Avelox to hospitals and other health care institutions; (4) produce information about Bayer's payments to health care professionals in connection with Avelox; (5) remove redactions that Bayer has applied to conceal computer file names of related documents; and (6) produce documents responsive to Realtor's document requests that demand information in connection with Realtor's retaliation claims.

         A. Lotus Notes Litigation Archive

         According to Realtor, Bayer employees utilized a Lotus Notes email system which stored electronic mail on Lotus Notes computer servers. In order to reduce storage costs, Bayer implemented a plan that would reduce active server storage while ensuring preservation. On June 14, 2004, Bayer sent an email instructing employees to delete their emails because an archived copy had been created on June 11, 2004. Realtor subpoenaed the former Bayer employee responsible for Lotus Notes, Philip Bossy, who confirmed that he was informed by the responsible employee that the archive was run successfully. Realtor argues that Bayer's has not searched the Lotus Notes Archive for the purpose of this case and thus relevant information has not been produced. Realtor points to the fact that Bayer has failed to produce any custodial emails in 2003 or 2004 for nearly half of the 20 Avelox custodians.

         Realtor argues that the six proportionality factors weigh in favor of production. First, Realtor argues that the qui tarn provisions of the False Claims Act are important tools for protecting the public interest by rooting out, preventing, and prosecuting fraud against the government. Second, Realtor argues that discovery costs do not outweigh the amount in controversy as Bayer sold over $1 billion worth of Trasylol, half of which was administered to Medicare and Medicaid patients, and taking into consideration the number of claims, and mandatory statutory penalties of between $5, 500 and $11, 000 per claim, and treble damages provided under the FCA, Bayer faces at least hundreds of millions of dollars in liability. Realtor argues that it has no independent access to the emails and that as a multi-billion dollar company; Bayer has the resources to bear the cost of production. Realtor also argues the emails are an important facet of discovery and that it has identified a significant drop-off in emails during this period. Realtor finally argues that Bayer cannot credibly suggest that the cost of accessing its own archive outweighs the utility of data it sought to preserve for litigation.

         In its opposition, Bayer argues that this issue has already been resolved. According to Bayer, Realtor raised the same issue with Judge Dickson. In response, Bayer explained that it was unable to confirm whether a copy of the archive was ever made, but that it would produce custodial data from the relevant time period. Judge Dickson then stated it was "unclear if anything remains for the Court to address regarding this issue" and denied Realtor's demand. Realtor did not appeal that order to Judge Linares, which Bayer believes ends the matter.[1] Second, Bayer argues it has already conducted and then re-run Realtor's requests and been unable to find the 2004 Lotus Notes Litigation Archive. Bayer acknowledges that some documents suggest that the archive exists, but it argues it has spent a significant amount of time looking for the archive and been unable to find it. Nevertheless, Bayer says it has found and produced a significant quantity of emails from the period. Bayer further argues that it has already produced the documents that would have been contained in the archive. Furthermore, Bayer says it is working on completing additional productions that contain documents from Tim Daniels and James Petersen and that it is working to confirm it has produced all documents in its possession from Paul Bedard. Finally, Bayer argues that even assuming that an archive was created, six years elapsed until the time Bayer learned about this litigation in 2010, thus Bayer had no obligation to preserve data before then.

         Opinion

         It is the opinion of the Special Master that Realtor has met its initial burden to demonstrate that the 2004 Lotus Notes Litigation Archive is relevant. However, Bayer has stated that it has actively searched for the 2004 Lotus Notes Litigation Archive and has been unable to locate the archive. Based on the representations of Bayer's counsel that it has thoroughly searched and attempted to locate the 2004 Lotus Notes Litigation Archive and been unable to discover the archive, the Special Master will deny Realtor's request for an order compelling Bayer to produce the 2004 Lotus Notes Litigation Archive. The Special Master cannot order Bayer to produce information that it avers that it cannot locate or does not have.

         B. Bonus and Incentive Compensation

         Realtor argues that the Complaint alleges that Bayer's scientific affairs personnel were improperly focused on increasing sales and that sales representatives were incentivized to promote Bayer products for off-label uses. Thus Realtor argues that information that Bayer financially incentivized its employees to engage in the very conduct at the core of this litigation is directly relevant. Realtor maintains that discovery has revealed that when calculating sales bonuses, Bayer did not distinguish between sales for on and off-label uses, thereby providing financial incentive for sales representative to promote drugs for uses that were not reasonable and necessary and, accordingly, non-reimbursable by federal health care programs.

         On October 5, 2018, Realtor wrote to Bayer requesting information related to bonus payment, performance review, and personnel files. Specifically, Realtor's request stated:

Realtor's Second Request for Production of Document Numbers 40 and 41 seek all documents describing the calculation, determination and payment of all incentives, awards or bonuses to scientific affairs, medical affairs, sales force, and brand management personnel relating to sales of Trasylol and Avelox. Realtor's Second Request for Production Number 79, and Third Request for Document Numbers 20, 21, 22, 26, 28, 44, and 47 also seek personnel file information. Bayer previously objected to producing much of this information on relevance and proportionality grounds, but at the September 5, 2018 meet and confer, Bayer indicated that it would consider production of this information for a subset of employees.
As an initial matter, with respect to documents related to the operation of bonus and incentive award programs for Trasylol and Avelox (e.g. how incentives and bonuses were calculated, etc.), we request that you produce that information within 14 days. This would include information describing the bonus and incentive award calculations criteria for all scientific affairs liaisons and sales representatives. With respect to report of incentive compensation for particular employees, we request that you provide the requested information for: (i) all Scientific Affairs personnel with Trasylol or Avelox-related responsibilities; and (ii) all sales representatives and institutional sales specialists with Trasylol-related responsibilities and who covered any of the 50 hospitals identified in Exhibit L. With respect to personnel file information, please produce personnel files (including performance reviews) for the following subset of employees: (i) all product management personnel with Trasylol or Avelox-related marketing responsibilities; (ii) all Scientific Affairs personnel with Trasylol or Avelox-related responsibilities; (iii) all Division Sales Managers with Avelox-related responsibilities; and (iv) all employees identified in Realtor's Third Request for Production Numbers 22, 26, 28, 44 and 47.

         Realtor now seeks an order requiring Bayer to produce the information identified above. Realtor argues it has only received limited discovery related to these requests. Realtor further alleges that during the parties' December 5, 2018 meet and confer, Bayer claimed to be unable to locate any additional documents related to bonus and incentive compensation. Nevertheless, Realtor argues that the factors of Rule 26(b)(2) weigh in favor of requiring Bayer to produce bonus and incentive compensation materials.

         Bayer argues that it has already fulfilled its obligations to produce documents responsive to this request. It believes Realtor's requests are overbroad, unduly burdensome, and only tangentially relevant. Bayer argues that after back-and-forth between the parties, Bayer conducted reasonable searches for documents associated with the specific individuals identified in Realtor's Third Request for Production Nos. 22, 26, 28, 44, and 47 to see whether it could identify performance evaluations, personnel files, or other documents relevant to bonus and incentive compensation. Bayer maintains that it was unable to find any responsive documents not already produced pursuant to the agreed-upon search terms. Bayer argues that Realtor, undeterred, then demanded additional searches for bonus and remuneration related documents at the parties' December 5, 2018 meet and confer. Bayer explains that it does not in the normal course of business review remuneration documents and that to undertake this task would be exceedingly burdensome. Bayer also argues that as things stand, Realtor admits she has received a cache of documents related to bonuses and incentive structure, and Bayer has stated that it has ...


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