In re ACTOS Antitrust Litigation

Background

Plaintiffs in the antitrust litigation filed a letter-motion asserting that Takeda Development Center Americas, Inc., Takeda Pharmaceutical Company Limited, Takeda Pharmaceuticals U.S.A., Inc., and Takeda America Holdings, Inc., collectively called Takeda, had waived attorney-client privilege over the document known as the Inaba Memo. Takeda had originally listed the memo as privileged, but later produced a mostly unredacted version in Japanese. Plaintiffs attached an English translation to a reply brief.

During a September 2022 telephone conference, Magistrate Judge Aaron asked Takeda whether it intended to produce the unredacted exhibits attached to Plaintiffs’ reply. Takeda answered that it did intend to produce them and said it was not proposing to reclaim the documents attached to the reply. Plaintiffs later displayed and emailed the memo to Takeda’s counsel during a November 2022 meeting, included it on a February 2023 list of documents Plaintiffs believed had been improperly redacted or withheld, and received a version with all redactions removed in March 2023. Takeda later attempted to reclaim the memo, withdrew that request in April 2023, and attempted to reclaim it again during the July 2023 deposition of its original author.

Takeda’s Objection

Takeda objected to Judge Aaron’s ruling under Federal Rule of Civil Procedure 72(a), which permits a district judge to modify or set aside a magistrate judge’s ruling on a non-final matter if the ruling is clearly erroneous or contrary to law.

Takeda argued that the protective order controlled the privilege-reclamation process and required only that the document have been produced inadvertently. Takeda also argued that Plaintiffs’ alleged failure to promptly notify Takeda under a New York professional-conduct rule should prevent a finding of waiver, and that waiver would unfairly prejudice Takeda by limiting its ability to provide context for the memo.

Court’s Analysis

Judge Abrams agreed with Judge Aaron that the protective order did not eliminate the possibility of waiver when a party acted “completely recklessly.” The court explained that this standard is met when the producing party shows no regard for preserving the confidentiality of privileged documents.

The court found that Takeda had repeated opportunities to reclaim the Inaba Memo. These included the September 2022 conference, the November 2022 meeting, the March 2023 reproduction of the memo with its redactions removed, and the April 2023 withdrawal of a reclamation request. The court found that Takeda did not directly dispute Plaintiffs’ account of these events or explain why it failed to act sooner. Even accepting Takeda’s claim that it did not discover the inadvertent production until April 2023, the court found that remaining unaware for so long was completely reckless because the memo’s production had been brought to Takeda’s attention multiple times.

The court also rejected Takeda’s reliance on the New York professional-conduct rule. Takeda cited no authority showing that an alleged violation of that rule changed the applicable privilege-waiver standard. The court likewise rejected Takeda’s argument about unfair prejudice because Takeda cited no supporting authority and the court was aware of none addressing such prejudice in this waiver analysis.

Disposition

Judge Abrams found no clear error in Judge Aaron’s ruling and overruled Takeda’s objection. The ruling that Takeda waived attorney-client privilege over the Inaba Memo therefore remained in effect.