In re: EpiPen Direct Purchaser Litigation

Background

Plaintiffs moved to require defendants to identify the defenses and affirmative assertions they would use against alleged bribery, mail fraud, and wire fraud offenses pleaded as predicate acts under the Racketeer Influenced and Corrupt Organizations Act. Plaintiffs specifically sought disclosures about defendants’ good faith, knowledge, intent, and beliefs about whether their conduct was lawful or protected by statutory safe harbors.

Plaintiffs also asked defendants to choose between two options for each state-of-mind assertion: waive attorney-client privilege and work-product protection over related documents and testimony, or keep those protections and be barred from making the assertion. Plaintiffs separately asked defendants to identify the safe-harbor defenses they intended to assert. Plaintiffs’ proposed order would have required disclosure of all defenses within 14 days and would have barred later use of defenses that were not identified. At the hearing, plaintiffs’ counsel acknowledged that the proposed relief was overbroad.

Defendants opposed the motion. They argued that the request was procedurally improper, that discovery was still ongoing, that they had not finalized all their defenses, and that the requested relief was too broad. Defendants also maintained that they had not waived privilege merely by making affirmative statements about their state of mind and had not asserted an advice-of-counsel defense.

Court’s analysis

The court explained that a party can waive attorney-client privilege expressly or by implication. Implied waiver may occur when a party testifies about attorney-client communications, places the attorney-client relationship directly at issue, or relies on an attorney’s advice as part of a claim or defense. But the court rejected plaintiffs’ broader argument that simply asserting good faith, lack of knowledge, lack of intent, or compliance with the law automatically waives privilege.

The court distinguished the prior cases relied on by plaintiffs. In the earlier related proceeding cited by plaintiffs, the defendants had expressly asserted reliance on counsel, inadvertently produced attorney emails, and later removed the reliance-on-counsel allegations. The court found that those unusual circumstances did not exist here. The court also found that the other cited cases involved an express reliance-on-counsel defense, privileged communications that had been placed directly at issue, or a defense that necessarily required disclosure of privileged material.

The court held that defendants had not expressly or impliedly waived privilege or work-product protection through their legal briefs, statements in the report prepared under Federal Rule of Civil Procedure 26(f), or answers to the complaint. Arguments that plaintiffs had not adequately alleged knowledge or intent were legal arguments about the sufficiency of the pleadings. Statements about industry standards, knowledge, willfulness, and intent were positions taken in the litigation, not assertions that defendants relied on legal advice. Likewise, references to “bona fide,” “good faith,” legal conduct, or industry standards were treated in context as denials of wrongdoing or legally based defenses, not as placing legal advice at issue.

The court also concluded that the defendants had given plaintiffs fair notice of their defenses in their answers. Rule 8 permits defendants to plead defenses in the alternative and to assert inconsistent defenses. Although the court recognized that requiring an early election could help focus discovery, it accepted defendants’ position that discovery was ongoing and that they might not know all their defenses until they understood plaintiffs’ positions and arguments. The risk that a defense might later be untimely for discovery purposes would fall on defendants, not plaintiffs.

The court noted that plaintiffs had not moved to compel a response to a particular discovery request about the safe-harbor defenses or shown that they had completed the required discussion process for such a request. Therefore, the order was limited to the group of defenses involving privilege issues.

Disposition

Judge John F. Docherty ordered that plaintiffs’ Amended Motion to Compel Election of Defenses was DENIED. The court did not make a final determination about whether any privilege or work-product protection had been waived, the scope of any possible waiver, or what discovery would ultimately be required.