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In re Subpoena on Third Parties Insogna

United States District Court, S.D. California

January 3, 2020

In re SUBPOENA ON THIRD PARTIES ANTHONY INSOGNA AND DAVID GAY
v.
HETERO LABS LIMITED, et al., Defendants. CELGENE CORPORATION, Plaintiff,

         Underlying action pending in the District Court of New Jersey: Case No. 17-cv-3387-ES-MAH

         ORDER: (1) GRANTING THIRD PARTIES ANTHONY INSOGNA AND DAVID GAY'S MOTION TO QUASH SUBPOENAS; (2) GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO FILE DOCUMENTS UNDER SEAL; AND (3) GRANTING THIRD PARTIES' MOTION TO FILE DOCUMENTS UNDER SEAL. [ECF NOS. 1, 6, 14]

          Honorable Allison H. Goddard United States Magistrate Judge.

         1. MOTION TO QUASH SUBPOENAS (ECF No. 1)

         Before the Court is Third Parties Anthony Insogna and David Gay's (collectively, “Third Parties”) Motion to Quash Subpoenas. ECF No. 1. The Third Parties ask the Court to quash deposition subpoenas pursuant to Federal Rule of Civil Procedure 45(d)(3) served on them by various defendants[1] in a case currently pending in the District Court of New Jersey. Defendants oppose the motion. ECF No. 9. The Court held a motion hearing on December 20, 2019. ECF No. 18. After consideration of the papers submitted and the parties' oral arguments, for the reasons set forth below, the Court GRANTS the motion.

         I. BACKGROUND

         In a case currently pending in the District Court of New Jersey, [2] Plaintiff Celgene Corporation (“Plaintiff”) filed actions against Defendants, alleging patent infringement arising from Defendants seeking FDA approval to market generic versions of Plaintiff's drug product, Pomalyst. ECF No. 1-2 at 2. There are five patents-in-suit, comprising two families of related patents: (1) U.S. Patent Nos. 8, 198, 262, 8, 673, 939, and 8, 735, 428, which are methods of treating multiple myeloma with pomalidomide; and (2) U.S. Patent Nos. 8, 828, 427 and 9, 993, 467, which are directed to capsule formulations of pomalidomide. ECF No. 7 at 6. Defendants contest infringement and validity of the patents-in-suit. Id. For example, based on Plaintiff's arguments and claim amendments made during prosecution of the '427 and '467 patents in response to prior art rejections by the Examiner, Defendants contend that Plaintiff is estopped from asserting infringement under the doctrine of equivalents. Id. at 8. Defendants also argue that the '427 and '467 patents are invalid as obvious over the prior art. Id. at 10.

         In the underlying case, Defendants noticed depositions of two attorneys who were involved in the prosecution of the patents-in-suit subject to litigation, Third Parties, who have presently moved the Court to quash the deposition subpoenas. See ECF No. 1-3 at 4, 9, 13, 18. Dr. Gay's deposition was noticed for August 23, 2019; Mr. Insogna's deposition was noticed for August 26, 2019. Id.

         Five years ago, Mr. Insogna was involved in the early prosecution of the application that ultimately issued as asserted U.S. Patent Nos. 8, 198, 262 and 8, 828, 427 for Plaintiff. ECF No. 1-2 at 5, 7. He was also the prosecuting attorney for one of Defendants' primary prior art references. ECF No. 7 at 6. He currently serves as litigation counsel for Plaintiff in the underlying case. ECF No. 1-2 at 5. Dr. Gay served as a prosecuting attorney for Plaintiff during the prosecution of the application that ultimately issued as asserted U.S. Patent No. 9, 993, 467 for Plaintiff. Id. at 5, 7. He continues to represent Plaintiff in patent prosecution matters. Id. at 5.

         Third Parties contend that their depositions should be quashed because Defendants seek testimony that is protected by attorney-client privilege and the work product doctrine. ECF No. 1-2 at 7. Third Parties also argue that their depositions should be quashed because their testimony is not relevant to any claim or defense, and thus imposes an undue burden. Id. at 8. Additionally, Third Parties contend that their deposition testimony would constitute unpermitted, unretained expert opinion. Id. at 10.

         Defendants contend that depositions of Third Parties are necessary to glean information about the submissions made to the Patent Office during prosecution, including the facts underlying the arguments each made that are relevant to Plaintiff's infringement theory under the doctrine of equivalents. ECF No. 7 at 5. Defendants seek Third Parties' testimony “on the meaning of certain arguments and amendments made during prosecution and the facts underlying those arguments and amendments.” Id. at 6. They also seek testimony regarding the preparation of 2013 and 2018 declarations created by Plaintiff's Rule 30(b)(6) witness, Mr. Tutino. Id. at 11. Additionally, Defendants contend that Mr. Insogna is uniquely in possession of knowledge relating to the underlying facts relating to Plaintiff's validity arguments that the patents-in-suit exhibit unexpected results. Id. at 5, 10. Further, Defendants contend that Mr. Insogna prosecuted one of Defendants' prior art patent applications, with claims to pomalidomide capsule formulations (one of which is also Plaintiff's), that Plaintiff attempts to discredit in the underlying case. Id. at 5, 12.

         II. LEGAL STANDARD[3]

         Pursuant to Federal Rule of Civil Procedure 45, “on timely motion, the court for the district where compliance is required must quash or modify a subpoena that . . . requires disclosure of privileged or other protected matter . . . or subjects a person to undue burden.” Fed.R.Civ.P. 45(d)(3)(A)(iii)-(iv).

         In determining whether a subpoena poses an undue burden, courts must weigh “the burden imposed on the party subject to the subpoena . . ., the relevance of the information sought to the claims or defenses at issue, the breadth of the discovery request, and the litigant's need for the information.” Malibu Media, LLC v. Doe, No. 16cv444-GPC-BGS, 2016 WL 7098807, at *1 (S.D. Cal. Dec. 6, 2016) (quoting Liberty Media Holdings v. Does 1-62, No. 11cv575-MMA-NLS, 2012 WL 628309, at *2 (S.D. Cal. Feb. 24, 2012); see Moon v. SCP Pool Corp., 232 F.R.D. 633, 637 (C.D. Cal. 2005) (though “irrelevance is not among the litany of enumerated reasons for quashing a subpoena found in Rule 45, courts have incorporated relevance as a factor when determining motions to quash a subpoena”).

         Where discovery is requested from non-parties, more stringent restrictions should be enforced. The Ninth Circuit has a long-standing policy of affording extra protection to non-parties subject to discovery requests. See High Tech Med. Instr., Inc. v. New Image Ind., Inc., 161 F.R.D. 86, 88 (N.D. Cal. 1995); see, e.g., Century Sur. Co. v. Master Design Drywall, Inc., No. 09cv280-LAB-AJB, 2010 WL 2231890, at *1 (S.D. Cal. June 2, 2010) (“Underlying the protections of Rule 45 is the recognition that the word ‘non-party' serves as a constant reminder of the reasons for the limitations that characterize ‘third-party' discovery.”) (citations and quotations omitted); Kim v. NuVasive, Inc., No. 11cv1370-DMS-NLS, 2011 WL 3844106, *2 (S.D. Cal. Aug. 29, 2011) (“Non-parties deserve extra protection from the courts”). Thus, the subpoena should be tailored to request only information reasonably necessary to address specific issues in the case. See Mattel, Inc. v. Walking Mountain Productions, 353 F.3d 792, 813 (9th Cir. 2003).

         Deposing opposing counsel raises additional concerns as its “increasing practice . . . [is] a negative development in the area of litigation, and one that should be employed only in limited circumstances.” Shelton v. Am. Motors Corp., 805 F.2d 1323, 1327 (8th Cir. 1986). Permitting depositions of opposing counsel “not only disrupts the adversarial system and lowers the standards of the profession, but it also adds to the already burdensome time and costs of litigation.” Id. at 1327. The Eighth Circuit has set out a three-part test for determining when it is appropriate to depose opposing counsel that is followed by courts in the Ninth Circuit.[4] Shelton, 805 F.2d at 1327. Therefore, opposing counsel may be deposed if the party seeking the deposition establishes:

(1) no other means exist to obtain the information than to depose opposing counsel, []; (2) the information sought is relevant and nonprivileged; and (3) the information is crucial to the preparation of the case.

Id. at 1327 (internal citation omitted). Generally, the burden of persuasion is on the party moving to quash the subpoena. Luck v. Univ. of San Diego, No. 13cv3088-JLS-BGS, 2014 WL 7111950, at *2 (S.D. Cal. Oct. 3, 2014). Shelton, however, shifts the burden to the party seeking the deposition. Erhart, 2017 WL 840648, at *3-*4 (citing Shelton, 805 F.2d at 1327). Accordingly, Defendants must demonstrate that Third Parties' deposition testimony is justified under Shelton.

         III. DISCUSSION

         Courts have declined to apply Shelton when the proposed deponent is not trial or litigation counsel in the underlying case. Pamida, Inc. v. E.S. Originals, Inc., 281 F.3d 726, 730-31 (8th Cir. 2002) (“the protection Shelton provides to opposing counsel only applies because opposing counsel is counsel in the instant case and not because opposing counsel had represented the client in the concluded case”); see, e.g., Sterne Kessler Goldstein & Fox, PLLC v. Eastman Kodak Co., 276 F.R.D. 376, 379 (D.D.C. 2011); United States v. Philip Morris, Inc., 209 F.R.D. 13, 17 (D.D.C. 2002). Here, Mr. Insogna currently serves as litigation counsel for Plaintiff in the underlying case. ECF No. 1-2 at 5. However, though Dr. Gay continues to represent Plaintiff in patent prosecution matters, he is not Plaintiff's counsel in the underlying case. Id. at 5, 7.

         In their oral argument, Defendants argued that the Shelton test should not apply to Mr. Insogna because, though he is litigation counsel for Plaintiff in the underlying case, he has not been actively involved, citing his absence during court proceedings and a lack of email correspondence. Defendants cited three out-of-district cases in support of their argument; however, these are not persuasive to this Court. See WMH Tool Group, Inc. v. Woodstock Int'l, Inc, No. 07cv3885, 2009 WL 89935, at *6 (N.D. Ill. Jan. 14, 2009) (a trademark infringement case from a district court in the Seventh Circuit that relies on precedent in its district in declining to adopt Shelton); Genal Strap, Inc. v. Dar, No. cv2004-1691-SJ-MDG, 2006 WL 525794, at * 4 (E.D.N.Y. Mar. 3, 2006) (a case in a district court in the Second Circuit, where the plaintiff invoked an inequitable conduct defense to a patent infringement counterclaim, that does not address the applicability of Shelton); Alcon Labs v. Pharmacia Corp., 225 F.Supp.2d 340, 343 (S.D.N.Y 2002) (a patent infringement case where the defendant invoked the inequitable conduct defense, from a district court in the Second Circuit, which expressly declined to address whether Shelton was the correct standard, and in fact used the Shelton standard in its analysis). Further, Mr. Insogna and other members of the same law firm are trial counsel for Plaintiff in the underlying case. The Court finds instructive a case that applied the Shelton factors to an attorney who was not trial counsel, but who belonged to the same law firm as trial counsel, noting the burden on litigation as well as the concern that his law partners may have to discontinue representation should he be called as a witness. Marco Island Partners v. Oak Dev. Corp., 117 F.R.D. 418, 420 (N.D. Ill. 1987).

         Therefore, this Court will apply the Shelton factors to Mr. Ignogna's deposition, and the traditional Rule 45 test to Dr. Gay's deposition.

         A. Mr. Insogna

         Defendants seek Mr. Insogna's deposition testimony as to the submissions made to the Patent Office during prosecution, including the facts Defendants claim are relevant to Plaintiff's infringement theory under the doctrine of equivalents. ECF No. 7 at 5. Specifically, they seek his testimony regarding the meaning of certain arguments and amendments made during prosecution, and the facts underlying those arguments and amendments. Id. Defendants also seek Mr. Insogna's testimony regarding the underlying facts relating to Plaintiff's validity arguments that the patents-in-suit exhibit unexpected results. Id. Specifically, Defendants seek Mr. Insogna's testimony regarding how Mr. Tutino's declarations were prepared and where the data in his declaration came from. Id. at 10. To compel Mr. Insogna's deposition, Defendant must show: (1) there are no other means to obtain the information; (2) the information is relevant and non-privileged; and, (3) the information is crucial to the preparation of the case. See Shelton, 805 F.2d at 1327.

         1. Other Means to Obtain the Information

         First, Defendants must show the information they seek from Mr. Insogna cannot be obtained through other means. Shelton, 805 F.2d at 1327.

         Defendants assert that the '427 and '467 patents are invalid as obvious over the prior art, including prior art formulations of pomalidomide. ECF No. 7 at 10. In response to Defendants' invalidity argument, Plaintiff has asserted that the formulations claimed by the '427 and '467 patents “unexpectedly yielded a stable formation.” Id. Defendants argue that the basis for these unexpected results is described in two declarations by Anthony Tutino, the inventor, which set out Plaintiff's formulation development efforts. Id. Thus, Defendants seek information as to how Mr. Tutino's declarations were prepared and the source of the data in his declaration. Id.

         Defendants contend that Mr. Tutino was not able to answer their questions on these subjects fully during his deposition, citing numerous “I don't know” responses. Id. at 11. Defendants also contend that they tried to get the information via another avenue, Plaintiff's Rule 30(b)(6) witness, but that Plaintiff responded that the proposed deposition topics regarding Mr. Tutino's declarations “seek[] information not in [Plaintiff]'s possession, custody, or control.”[5] ECF No. 7 at 10. Therefore, Defendants argue that deposing Mr. Insogna (and Dr. Gay) is the only means to glean information about the preparation of the declarations and their factual underpinnings. Id.

         The information Defendants seek from Mr. Insogna can be obtained through other means, including discovery methods that would be more efficient than third-party depositions regarding events that happened many years ago. Defendants acknowledged at oral argument that they sought this information through interrogatories and requests for productions to Plaintiff, but do present evidence that they were unable to obtain necessary information from these methods. There is a Special Master appointed in the underlying case, and it does not appear that Defendants made an effort to compel further responses or documents using the Special Master in the underlying litigation. Moreover, obtaining information from many years ago through the testimony of a third-party witness does not appear to be an efficient method to achieve Defendants' stated goals.

         Therefore, the Court finds that Defendants have not met their burden of showing that the information they seek from Mr. Insogna cannot be obtained through other means.

         2. Status of the Information as to Relevance and Privilege

         Second, Defendants must show the information they seek from Mr. Insogna is both relevant and non-privileged. Shelton, 805 F.2d at 1327.

         i. Relevance

         Courts have broad discretion to determine relevance for discovery purposes. Doherty v. Comenity Capital Bank, No. 16cv1321-H-BGS, 2017 WL 1885677, at *2 (S.D. Cal. May 9, 2017) (citing Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002)); see also Youngevity Int'l, Inc. v. Smith, No. 16cv704-BTM-JLB, 2017 WL 2692928, at *10-*11 (S.D. Cal. June 22, 2017). When analyzing relevance, Rule 26(b) no longer limits discovery to information “reasonably calculated to lead to the discovery of admissible evidence.” In Re Bard IVC Filters Prods. Liab. Litig., 317 F.R.D. 562, 563-64, 564 n.1 (D. Ariz. 2016) (discussing the 2015 amendments to the Federal Rules of Civil Procedure and the advisory committee's explicit removal of the phrase “reasonably calculated, ” and listing cases that continue to use the outdated pre-2015 standard). The relevance standard is commonly recognized as one that is necessarily broad in scope in order “to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be ...


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