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Federal Trade Commission v. Indivior, Inc.

United States District Court, E.D. Virginia, Richmond Division

August 1, 2016

FEDERAL TRADE COMMISSION, Petitioner,
v.
INDIVIOR, INC., Respondent.

          Federal Trade Commission, Petitioner, represented by Burke William Kappler, Federal Trade Commission, pro hac vice & Robert P. McIntosh, United States Attorney's Office.

          Indivior, Inc., Respondent, represented by William V. O'Reilly, Jones Day & Mark Robert Lentz, Jones Day.

          Craig T. Merritt, Special Master, represented by Craig Thomas Merritt, Christian & Barton LLP & Clint Andrew Nichols, Christian & Barton LLP.

          Javier Rodriguez, Material Witness, represented by John Stone West, Troutman Sanders LLP & William Thomas Hassler, Steptoe & Johnson LLP, pro hac vice.

          MEMORANDUM OPINION

          ROBERT E. PAYNE, Senior District Judge.

         This matter is before the Court on the SECOND INTERIM REPORT AND RECOMMENDATIONS OF SPECIAL MASTER (Docket No. 71) and the SUPPLEMENT TO SECOND INTERIM REPORT AND RECOMMENDATIONS OF SPECIAL MASTER (Docket No. 73) (collectively referred to as "Special Master's Report"). Also before the Court is the FEDERAL TRADE COMMISISON'S MOTION TO ADOPT SPECIAL MASTER'S RECOMMENDATION OR, IN THE ALTERNATIVE, TO ORDER PRODUCTION ("MOTION TO ADOPT/PRODUCE") (Docket No. 74) and the RESPONDENT INDIVIOR, INC.'S CORRECTED OBJECTIONS TO THE SPECIAL MASTER'S SECOND INTERIM REPORT AND RECOMMENDATIONS, AS WELL AS THE SUPPLEMENT THERETO (Docket No. 83) ("OBJECTIONS AND RECOMMENDATION").

         BACKGROUND

         The Federal Trade Commission ("FTC") issued a Civil Investigative Demand ("CID") to Reckitt Benckiser Pharmaceuticals, Inc. ("Reckitt"). During the course of these proceedings Reckitt was acquired by Indivior, Inc. and, pursuant to an ORDER entered herein on May 23, 2016 (Docket No. 100), Indivior, Inc. was substituted as the party respondent in place of Reckitt. However, because the documents and most of the briefing herein refer to the respondent as Reckitt, that appellation will be retained.

         Pursuant to the CID, the FTC sought to determine whether Reckitt had engaged in unfair methods of competition with respect to its branded drug, Suboxone. PETITION OF THE FEDERAL TRADE COMMISSION FOR AN ORDER ENFORCING CIVIL INVESTIGATIVE DEMAND (Docket No. 2) ("FTC Initial Petition"). The conduct under investigation was particularized as follows:

investigating whether Reckitt abused public regulatory processes, including filing a citizen petition with the U.S. Food and Drug Administration ("FDA") and negotiating with competing manufacturers, to maintain its monopoly in the market for Suboxone, an opioid addiction treatment distributed through prescription, rather than by clinicbased methods.

         FTC Initial Petition, p. 1. In response to the CID, Reckitt produced almost 600, 000 documents, but withheld approximately 24, 000 documents on the ground of attorney-client privilege.[1] The FTC took the view that certain types of documents were not privileged and sought production of those documents. MEMORANDUM IN SUPPORT OF PETITION OF THE FEDERAL TRADE COMMISSION FOR AN ORDER ENFORCING CIVIL INVESTIGATIVE DEMAND (Docket Nos. 23 and 24). The FTC contended therein that, under the law of the Fourth Circuit, Reckitt was improperly withholding, as privileged, documents that were not at all privileged because the documents sought by the FTC fell within the rule of the Fourth Circuit that, "if a client communicates information to his attorney with the understanding that the information will be revealed to others, that information, as well as the details underlying the data which was to be published' will not enjoy the privilege." United States v. Under Seal, 33 F.3d 342, 354 (4th Cir. 1994) (quoting United States v. Under Seal, 748 F.2d 871, 875 (4th Cir. 1984).

         Reckitt took the view that decisions of other circuits counsel a different result and that the cases relied upon by the FTC have been overruled, sub silento, by the Fourth Circuit's decision in In re: Grand Jury Subpoena, 341 F.3d 331 (4th Cir. 2003).

         By Memorandum Opinion issued on March 10, 2015 (Docket No. 42) ("March 10 Opinion"), the Court rejected the arguments made by Reckitt and (1) held that the rules of privilege to be applied in the production of documents herein would be as set forth under appropriate law of the Fourth Circuit; (2) required Reckitt to identify and produce all documents that, by virtue of the rulings in the Memorandum Opinion, required no further review by a Special Master; and (3) ordered that a Special Master would review the remaining documents in camera in accord with appropriate Fourth Circuit decisions. (ORDER, Docket No. 43). After affording the parties an opportunity for input into the selection of a Special Master to accomplish the document review of the remaining privileged documents, the Court appointed a Special Master (Docket No. 48). The Special Master was tasked with the responsibility to review the privileged documents as required by the law of the Fourth Circuit and to make a Report and Recommendation respecting the results of that review.

         After consulting fully with the parties, holding an evidentiary hearing, and receiving briefing and reviewing the documents, the Special Master issued the Special Master's Report reflecting the results of the in camera review of 3, 704 documents. Those documents were selected by Reckitt, upon the instruction of the Special Master, as documents related to the preparation of the citizen's petition and other documents that are follow up communications between Reckitt and the FDA and certain public relations documents concerning the citizen's petition and the withdrawal of Suboxone tablets from the market and documents relating to the negotiations between Reckitt and the manufacturers of generic competing drugs to establish a Joint Risk Evaluation and Mitigation ...


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