(CN) - A federal judge improperly ordered the German maker of the blood thinner Pradaxa to send 13 employees here for depositions, a divided 7th Circuit ruled.
Pradaxa, an oral anticoagulant used to prevent strokes, reached blockbuster status in 2011 when revenue from the drug climbed to more than $1 billion.
The drug has also generated costly legal headaches for its manufacturer, Boehringer Ingelheim International GmbH, which faces a consolidated mislabeling action in the Southern District of Illinois.
Chief U.S. District Judge David Herndon presides over the case in East St. Louis, Ill. In December he ordered sanctions against Boehringer for discovery abuse, and imposed nearly $1 million in fines against it.
He also ordered the company to send 13 Germany-based employees to the United States for depositions instead of the previously agreed upon city of Amsterdam.
According to the case record, Boehringer has been stubbornly defiant in complying with Herndon's discovery orders. For one, the company failed to preserve the records of Dr. Thorsten Lehr, its Pradaxa expert, who left the company in September 2012.
Herndon called it "nonsense" when Boehringer officials claimed that they did not know Lehr's files contained info related to the litigation.
He also took issue with Boehringer's failure to put a litigation hold on its employees' text messages until October 2013, after the company itself had, a year earlier, persuaded the Judicial Panel on Multidistrict Litigation to set up the Pradaxa MDL in light of the nationwide scope of the litigation.
Before imposing the $1 million fine and U.S. deposition decree, Herndon had leveled a $30,000 fine against Boehringer for its noncompliance with discovery.
The 13 Boehringer employees now facing deposition here are research scientists: 10 Germans and three U.S. citizens living in Germany.
Boehringer turned to the 7th Circuit in Chicago for a writ of mandamus quashing the second set of sanctions.
The Chicago-based federal appeals court threw Boehringer a lifeline Friday, with a divided three-judge panel finding that Herndon had exceeded his authority with the depositions transfer order.
"A federal judge is empowered to subpoena a U.S. citizen living abroad to appear before him and be deposed, but only if the citizen's testimony can't be obtained in admissible form otherwise - and here it can be, by a deposition conducted in Amsterdam," Judge Richard Posner wrote for the majority.
"So that statute was not authority for what the judge did, even with regard to Boehringer's U.S. citizen employees in Germany. And foreigners who are not in the United States are beyond the subpoena power of our courts even if their testimony can't be obtained in admissible form otherwise."
Posner also found that the order could strain U.S.-German relations.
"Suppose Boehringer complains to the German government, or for that matter the U.S. State Department, that the judge's order is ultra vires and infringes on German sovereignty. Do we need that?" Posner asked.
Judge David Hamilton argued in dissent that the issue was less clear cut.
"Extensive persuasive authority holds that a court may order a foreign defendant's officers, directors, or managing agents to appear for depositions in the United States," Hamilton wrote.
Though Herndon's order went a step further by instructing Boehringer to send nonexecutive and managerial employees to the United States for depositions, Hamilton said the order's legality is debatable under 4th and 2nd Circuit precedent.
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