Racies v. Quincy Bioscience, LLC

Background

Phillip Racies moved to reopen discovery before trial so he could depose a witness designated under Federal Rule of Civil Procedure 30(b)(6) about Quincy Bioscience, LLC’s sales of Prevagen to California consumers. He also sought sanctions, including an order requiring Quincy to produce a knowledgeable corporate witness and treating a previously disclosed sales figure as established for trial.

The dispute followed the court’s denial of Racies’s second motion in limine. That motion sought to prevent Quincy from contesting the amount paid by class members for Prevagen products during the class period. The court had ruled that Racies—not Quincy—had the burden of proving damages at trial.

Discovery history and the court’s reasoning

In 2016, Racies served interrogatories seeking sales information, including wholesale and retail units sold, net sales, profit margins, wholesale prices, suggested retail prices, average retail prices, and the number of products sold. Quincy later produced sales information and supplemented estimated California sales information.

In an October 2017 declaration, Quincy’s then-president, Mark Y. Underwood, explained that most of Quincy’s sales were to third-party retailers and distributors. He stated that Quincy could not identify consumers who bought Prevagen from those retailers and distributors, and that the information produced included direct and wholesale sales rather than retail sales by third-party retailers.

Under Rule 16, a court may modify the discovery schedule only for “good cause,” which primarily depends on the diligence of the party seeking the change. The court determined that Racies had been on notice since at least October 13, 2017, that the figures mainly represented sales to retailers and distributors and that Quincy did not have retail information from those third-party retailers. The court said Racies could have pursued third-party discovery, expert discovery, a Rule 30(b)(6) deposition, or other relief at that time. His failure to act for more than two years meant he had not been diligent.

The court therefore denied the motion to reopen discovery and declined to impose sanctions. It stated that Racies could present admissible evidence at trial to support his damages theory, including testimony from Underwood about the significance of the sales information. The court also noted that, if a defense witness contradicted prior representations about the figures, it might allow Racies to cross-examine defense counsel about the discrepancies.

Motion to file under seal

Racies separately filed an administrative motion to submit an unredacted version of his motion and supporting materials under seal. He sought to seal California sales information, supporting declarations, and Exhibits C and F.

Because the materials were attached to a nondispositive motion, the court applied the “good cause” standard, which requires a particularized showing that disclosure would cause specific prejudice or harm. Quincy submitted a declaration stating that the sales information was confidential, not known to the public or its competitors, and that disclosure would injure its business interests. The court had previously found materially identical information sealable and saw no reason to reach a different conclusion.

Disposition

The court DENIED Plaintiff’s motion to reopen discovery, Dkt. No. 239, and GRANTED the administrative motion to seal, Dkt. No. 238. Documents covered by the granted sealing request will remain under seal, and the public will have access only to the accompanying redacted versions. Judge Haywood S. Gilliam, Jr. signed the order on January 4, 2020.