United States: Nixing Discovery On Foreign Regulatory Submissions

Last Updated: September 4 2017
Article by Eric Alexander

The cases we typically write about focus on events after medical products have made their way through the applicable regulatory process and been marketed in the United States. The marketed product is used, people claim to have been injured by it, and they sue the manufacturer under various product liability theories. Often, in the course of seeking lots of discovery about the product and manufacturer, the plaintiffs in such cases will seek documents relating to foreign regulatory submissions and interaction. While there might be some relevance of such documents in some cases, getting and producing them tends a pretty big pain for reasons like privacy laws and translation. Plus, there is plenty of room for confusion given different regulatory standards in the United States and elsewhere around the world. Under the old version of Fed. R. Civ. P. 26, however, some degree of burdensome foreign discovery was pretty standard in large drug or device litigation. We have seen some signs (like here and here) that the new version of Rule 26 will be less friendly to plaintiffs seeking foreign fishing expeditions.

Schueneman v. Arena Pharms., Inc., No. 10cv1959-CAB (BLM), 2017 WL 3118738 (S.D. Cal. July 21, 2017) (Magistrate order), aff'd 2017 WL 3587961 (S.D. Cal. Aug. 21, 2017), is a securities case based on the allegation that the defendant pharmaceutical company defrauded investors by its representations about the likelihood that its new weight loss drug would get approved by FDA. The focus of the allegation is about tumors in a rat study that ultimately led to FDA issuing a non-approvable letter in October 2010. (As an aside, the drug was developed with a serotonin receptor subtype mechanism of action that was supposed to avoid heart valve issues seen with other weight loss drugs, litigation over which included allegations about a signal from tumors in a rat study—although the main plaintiff expert supporting that allegation did not get past Daubert.) The non-approval was made public at that time, although the plaintiff investors claim that they continue to have been misled for another three months. (The decisions do not mention either, but there was a fair amount of press on the rat study in September 2010 and the drug was ultimately approved, after more research, in June 2012.) In March 2012, the company submitted an application to the European Medicines Agency to try to market the drug in Europe. After some back and forth, the company withdrew that application in May 2013. (We are feeling parenthetical, so we will note that the withdrawal of the European application was also the subject of U.S. press attention, spurred on by Public Citizen, whose actions often seem coordinated with litigation efforts.) The plaintiffs sought every document conceivably related to the European application and its withdrawal, even though the allegations in the case were about earlier representations about FDA approval. Defendants balked and the fight was joined.

The requirement that discovery be "relevant to any party's claim or defense and proportional to the needs of the case" allowed for a more rational analysis that we have seen in the past on such disputes. Noting the "different standards utilized by the EMA and the FDA and the different time frames of the statements," the court required plaintiffs to "explain how documents presented to the EMA, especially those unrelated to the Rat Study, are relevant to the issue in this case of whether Defendants 'intentionally withheld information material to the market's assessment of whether and when the FDA would likely approve [L]ocaserin.'" 2017 WL 3118738, *4. Plaintiffs could not do that. They also could not establish proportionality, a burden now assigned to the proponent of the discovery (although the posture here was a motion to compel rather than a motion for protective order). Defendants had already produced or were producing lots of documents and estimated that a production of the documents at issue would take weeks and cost $80,000. In the past, such a cost estimate for even marginal documents sought from a drug company would probably not be seen as an undue expense sufficient to cut off the discovery. Now, in the age of proportionality, it is part of the puzzle:

Given the extremely broad discovery requests, including the fact that the requests are not limited to the Rat Study, the minimal relevance of the statements made after the class period in an application in the European Union involving drug standards that are different from those in the United States, and the large number of potentially responsive documents, the Court finds that requests 34-37 are not proportional to the needs of the case.

Id. Similar reasoning could be applied to disallow quite a few requests in drug and device product liability cases, particularly those on foreign regulatory discovery.

The defendant also forced plaintiffs to reveal the identity and contact information for six confidential informants relied upon for allegations in the complaint. Plaintiffs claimed attorney work product protection, which the magistrate rejected and the district court found to be so frivolous as to merit the award of expenses under Fed. R. Civ. P. 37(a)(5). Id. at **6-7; 2017 WL 3587961, *2. We cannot recall seeing a product liability plaintiff resist discovery on the basis for allegations in a complaint on a claim of work product protection, so we will not dwell on this holding—but the same reasoning would apply. Rather than just sound like homers and cheer when a drug company wins discovery motions, we will say that we like it when discovery is ordered on the actual allegations in the complaint and limited on issues outside of the allegations in the complaint.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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