Federal Trade Commission v. Vyera Pharmaceuticals, LLC
- Denise Cote
- 1:20-cv-00706
- U.S. District Court · Southern District of New York
- 5
In Federal Trade Commission v. Vyera Pharmaceuticals, Judge Cote denied Martin Shkreli’s motion to stay discovery until his prison release.
Martin Shkreli’s request to pause discovery was denied, so the discovery schedule in the case continued. The ruling also affected the plaintiffs and other defendants because the litigation was not delayed.
What happened
Federal Trade Commission v. Vyera Pharmaceuticals, LLC involves claims by the Federal Trade Commission and several States concerning allegedly anticompetitive conduct in the generic drug market. Discovery was already underway, with deadlines approaching.
Martin Shkreli, who was incarcerated, asked the court to pause further discovery until his expected release in 2023. He argued that communicating with his lawyers and preparing his defense while imprisoned was difficult and that continuing discovery would interfere with his access to the courts and counsel.
Judge Denise Cote denied Shkreli’s motion. She found that he had not shown the required good reason for a stay, noting the public interest in promptly resolving the case, the age and ongoing nature of the alleged conduct, the case’s existing discovery schedule, and Shkreli’s available ways to communicate with his experienced lawyers.
The detailed version
- Federal Trade Commission v. Vyera Pharmaceuticals, LLC · No. 1:20-cv-00706
- Denise Cote
- Jan. 8, 2021
Background
The Federal Trade Commission, New York, California, Ohio, Pennsylvania, Illinois, North Carolina, and Virginia sued Vyera Pharmaceuticals, LLC, Phoenixus AG, Martin Shkreli, and Kevin Mulleady. The opinion states that the claims concern allegedly anticompetitive conduct beginning in 2014 and that the alleged core conduct appeared to remain ongoing. The plaintiffs sought equitable monetary relief.
Discovery had begun shortly after the action was filed. The court had previously denied the defendants’ request to pause discovery while their motions to dismiss were pending, and those motions were largely denied. Fact discovery was scheduled to end on February 26, 2021; expert discovery was scheduled to end on August 6; and the pretrial order was due October 20. Shkreli’s deposition was scheduled for January 27 and 28, 2021.
Shkreli was incarcerated at the Allenwood Low Security Federal Correctional Institution and was due to be released on September 14, 2023. He moved to stay the litigation, particularly further discovery, until his release. He argued that incarceration made it difficult to communicate with counsel and prepare his defense, and that proceeding would violate his constitutional access to the courts and related right to counsel.
Court’s analysis
Under Rule 26 of the Federal Rules of Civil Procedure, a court may stay discovery for “good cause,” meaning a sufficient factual reason for pausing it. The party seeking the stay bears the burden of showing good cause.
The court held that Shkreli had not met that burden. It emphasized the federal government’s and the States’ interest, as well as the public’s interest, in resolving the complex case without unnecessary delay. The court also noted that the alleged conduct could have a prompt and significant effect on the generic drug market and pharmaceutical consumers if the plaintiffs prevailed.
The court further found that Shkreli had not shown unfair prejudice from continuing the case while he was incarcerated. The plaintiffs had completed a lengthy administrative investigation and promptly provided the defendants with the administrative record. The parties had also established a discovery protocol and planned around it. The court considered Shkreli’s request untimely because he waited to seek a stay based on his claimed communication difficulties.
The court noted that Shkreli was represented by experienced counsel from two law firms and had several communication options, including legal mail, legal visits, unmonitored legal calls, and email and telephone systems operated by the Bureau of Prisons. The opinion also states that counsel had not scheduled available prison visits despite invitations to do so, although counsel cited pandemic-related health risks. The court concluded that Shkreli’s access to counsel was at least as good as that available to incarcerated criminal defendants.
Disposition
Judge Denise Cote denied Shkreli’s November 25, 2020 motion to stay discovery pending his release. The order addressed discovery management and did not decide the underlying claims against the defendants.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.