DQs Dodged in Lidoderm Price-Fixing Suit

SAN FRANCISCO (CN) - A federal judge on Monday said he will reject a pharmaceutical company's motion to disqualify opposing counsel for allegedly misusing an inadvertently disclosed privileged email.

Attorneys representing Teikoku Pharma in a multidistrict antitrust case over the painkiller patch Lidoderm accused plaintiff attorneys of unethically exploiting a confidential email about a proposed settlement, which was accidently added to a trove of discovery disclosures in July.

United Food and Commercial Workers Local 1776, which serves as lead plaintiff of the multidistrict antitrust class action, argues the defendants' May 2012 settlement of patent claims stifled competition by keeping a cheaper, generic version of the painkiller patch off the market.

During a hearing Monday, Teikoku attorney Joseph Meckes said despite knowing the document was confidential and anticipating a claim of privilege, the plaintiff attorneys translated the email from Japanese to English and cited the document in their Oct. 2 motion to produce or preclude evidence at trial.

Meckes said the confidential email was circulated to at least 12 plaintiff law firms and that the file provided a "roadmap" for depositions based on private information that could not have been gleaned from any other source.

"When they anticipated privilege, that was the time to stop," said Meckes. "They clearly violated their ethical obligations."

Plaintiff attorney Dena Sharp countered that she and her colleagues neither knew nor anticipated the defense would claim the document was privileged. She said the email sent by Squire Patton Boggs attorney Norikyuki Shimoda merely reported facts and did not analyze the settlement offer, meaning it does not qualify for attorney-client privilege.

"Only those communications made for a joint strategy are protected under common interest," Sharp argued. "If he had no strategies to convey to his clients, it was not attorney-client privileged information."

U.S. District Judge William Orrick said precedent does not favor disqualifying attorneys without a blatant or egregious violation. He said although the document was marked as confidential, it was not as "starkly obvious" as the defendants claim.

The defense pointed to a string of cases in which attorneys were disqualified for misusing privileged information, including the 2013 Central District of California case United States ex rel. Hartpence v. Kinetic Concepts Inc. In that case, counsel was disqualified for failing to seek the court's advice when it obtained an inadvertently disclosed privileged document and quoted from it in pleadings.

Sharp replied that all of the cases cited by the defense in which attorneys were disqualified share a common theme - the attorneys "knowingly" used the privileged information. She said the email in question was not "obviously privileged" and therefore did not justify disqualifying counsel.

Orrick agreed that the attorneys' actions did not appear to warrant disqualification.

"I don't think the nature of the abuse of some of the other cases you cited suggest to me that I should disqualify both plaintiffs' firms that have been working on this case since the beginning," Orrick said. "It's just not going to happen."

However, he did find the disputed email contained strategic advice from a lawyer and therefore qualifies as a privileged communication.

In July, Orrick mostly denied a motion to dismiss the class action complaint while striking plaintiffs' claims for injunctive relief with leave to amend. In April, the judge narrowed the number of state-law claims plaintiffs could assert against the pharmaceutical company defendants.

A jury trial is scheduled to begin on Aug. 21, 2017.

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