Pardi v. Tricida, Inc.

Background

The case involves allegations that Gerrit Klaerner misrepresented the Food and Drug Administration’s review of veverimer, a pharmaceutical product Tricida was developing. The alleged statements concerned FDA review issues and the reasons the FDA did not plan to hold an Advisory Committee meeting. Tricida was initially a defendant, but Plaintiffs voluntarily dismissed their claims against it after it entered bankruptcy proceedings. Judge Gilliam referred discovery disputes to the magistrate judge who issued this order.

Lead Plaintiff Jeffrey Fiore served requests for production on Klaerner and a subpoena on Tricida. Fiore sought documents concerning FDA proceedings, stock sales, communications with investors and analysts, and other subjects. The court applied Federal Rule of Civil Procedure 26, which permits discovery of nonprivileged information relevant to a claim or defense and proportional to the case’s needs.

Requests Served on Klaerner

The court ordered Klaerner to produce Board materials and documents from Tricida’s directors concerning communications between Tricida and the FDA about the FDA’s review of the drug application from January 2020 through May 7, 2020. The court also ordered production of documents responsive to several FDA-related requests covering that period. It denied Fiore’s request for production beyond that time and subject matter.

For later FDA proceedings, including the FDA’s August 2020 Complete Response Letter, an October 2020 meeting, and a December 2020 administrative appeal, the court denied the request to compel production except for documents Klaerner had already agreed to produce concerning disclosures about the May 1, 2020 FDA meeting.

The court ordered limited production concerning stock trading. Klaerner had to produce Tricida’s applicable trading policies, documents about his own potential or actual violations of those policies if they related to the alleged misrepresentations or his knowledge of the FDA proceedings, documents sufficient to show prohibited trading periods in 2020 and 2021, documents concerning his own actual or contemplated trading activity, and records concerning his own ownership or transfers of Tricida stock. The court denied requests for broader production concerning other people’s trading or trading periods outside the specified scope.

The court ordered Klaerner to produce communications and other documents concerning FDA concerns from January 2020 through May 7, 2020, in response to requests about communications with investors, analysts, the press, and others. He also had to produce documents concerning later disclosures that he intended to argue were corrective of the alleged May 7, 2020 misstatements.

The court denied the request for complete calendars and appointment books, but required production of calendar entries related to the May 1, 2020 FDA meeting or related disclosures, as well as calendar materials within other requests for which production was ordered. It ordered production of Klaerner’s own certifications of compliance with Tricida’s code-of-conduct policies, but not certifications for other people. It denied requests concerning clinical-trial design and completion, except to the extent covered by narrower FDA-communications requests, and denied the request concerning external corporate communications policies.

Klaerner was ordered to begin rolling production no later than October 24, 2024, and to complete it no later than November 15, 2024.

Subpoena Served on Tricida

Fiore’s subpoena to Tricida largely mirrored the requests served on Klaerner. Tricida, acting through its liquidation trustee, agreed to produce documents under a search-term protocol. Klaerner sought to prevent or limit that production, arguing that it would duplicate documents gathered during Tricida’s bankruptcy and might include his privileged communications with his attorneys.

The court held that Klaerner could seek protection only for his own legally recognized interests, not for general objections about the relevance or burden of discovery imposed on Tricida. The court found that his recognized interest was limited to potentially privileged attorney-client communications concerning this litigation. It rejected his request to prevent Tricida’s production based on duplication, general relevance, burden on Tricida, or unspecified prejudice.

The parties and Tricida were ordered to meet and confer about a process for identifying and screening Klaerner’s potentially privileged communications. They had to file either a stipulation or a joint letter about that process by October 17, 2024. Unless they agreed on an initial production scope that avoided the risk of disclosure, Tricida could not produce documents under the subpoena until a screening process was established by agreement or court order. The court would not consider further arguments seeking to limit the subpoena’s scope.

Disposition

The court limited the scope of documents Klaerner had to produce and denied Fiore’s requests beyond the specified limits. It declined to limit the scope of Tricida’s production, except for the required screening of Klaerner’s potentially privileged attorney-client communications. Judge Gilliam is identified in the opinion as the judge who referred the discovery disputes to the magistrate judge.