Ischemia Research and Education etc. v. Pfizer Inc.		CASE NO. 104CV026653
DATE: 25 April 2014	TIME: 9:00	LINE NUMBER: 1

This matter will be heard by the Honorable Judge Socrates Peter Manoukian in Department 19 in the Old Courthouse, 2nd Floor, 161 North First Street, San Jose.  Any party opposing the tentative ruling must call Department 19 at 408.808.6856 and the opposing party no later than 4:00 PM Thursday 24 April 2014.  Please specify the issue to be contested when calling the Court and counsel.

On 25 April 2014, the motions of plaintiff Ischemia Research and Education Foundation (“IREF”) for a protective order precluding further expert depositions and responses to defendant Pfizer Inc.’s (“Pfizer”) twelfth set of special interrogatories and to file records under seal were argued and submitted. Pfizer filed a formal opposition to the motion for a protective order. No opposition was filed to the motion to file records under seal.[1]

All parties are reminded that all papers must comply with California Rules of Court, rule 3.1110(f).[2]

Statement of Facts

This is a trade secrets misappropriation action arising out of IREF’s claims that defendant Ping Hsu, while employed by IREF, accessed its proprietary databases for the benefit of Pfizer and provided Pfizer with confidential information for use in a Phase III clinical trial for one of its drugs.

In November of 2008, this action originally came on for a jury trial. After six weeks of trial, the jury returned a verdict in favor of IREF against Pfizer and defendant Hsu in the amount of $38.7 million. On 30 July 2009, the Court granted Pfizer’s motion for a new trial as to damages and liability. The Court of Appeal affirmed the order granting a new trial on 26 February 2013.

Discovery Dispute

On 28 February 2014, Pfizer served Special Interrogatories, Set Twelve (“SI”) on IREF.

On 20 March 2014, Pfizer served notices of deposition on IREF for Al Hobbs, Sam Teichman and Jimmy Jackson, IREF’s designated experts.

On 24 March 2014 and 26 March 2014, counsel for IREF and Pfizer participated in two extensive meet-and-confer conferences. IREF’s counsel requested that Pfizer withdraw the notices of deposition in light of the fact that the experts had already been deposed prior to the first trial. IREF’s counsel also requested that Pfizer withdraw the SI. Pfizer’s counsel indicated that Pfizer would not withdraw the notices or the SI.

Consequently, on 27 March 2014, IREF filed this motion for a protective order precluding further expert depositions and responses to the SI. Pfizer filed its opposition on 14 April 2014. On 18 April 2014, IREF filed a motion to file records under seal, and its reply brief in support of its motion for a protective order.

Discussion

I. Motion for a Protective Order

IREF moves for a protective order precluding further expert depositions and responses to the SI.

A. Legal Standards

In general, “[a]ny party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter … if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence.” (Code Civ. Proc., § 2017.010.) For good cause shown, a court may make any order that justice requires to protect any party, deponent, or other natural person from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense relative to discovery matters. (Code Civ. Proc., §§ 2025.420, subd. (b), 2030.090, subd. (b).)

The party moving for a protective order bears the burden of demonstrating good cause for the order by explaining and justifying its objections to the discovery at issue. (See Fairmont Ins. Co. v. Superior Court (2000) 22 Cal.4th 245, 255.) However, where more than 35 specially prepared interrogatories have been served with a declaration of necessity, and the responding party seeks a protective order, the propounding party has the burden to prove the excess number of interrogatories is justified. (See Code Civ. Proc. § 2030.040, subd. (b).)

B. Order Precluding Further Expert Depositions

IREF contends that further depositions of their expert witnesses, Sam Teichman, Jimmy Jackson and Alan Hobbs, would be duplicative, unduly burdensome, and oppressive. It argues that these witnesses were already deposed at length and testified at trial. Therefore, IREF reasons that their opinions have been fully explored and no new issues exist that require additional discovery.

In opposition, Pfizer contends that further discovery is necessary as IREF’s expert witnesses will be introducing new opinions at the second trial. It argues that IREF has put forward three new theories of damages and, as a result, has increased the requested damages from $50 million to $900 million. In addition, Pfizer contends that, as nearly seven years has passed since the experts were deposed, they may have engaged in new activities that could impact their qualifications and credibility. Therefore, Pfizer maintains that it is entitled to re-depose these experts in order to determine the basis for these new damages theories and whether the experts have engaged in additional activities that could impact their qualifications and credibility as expert witnesses.

The party or deponent seeking a protective order must show that the burden, expense, or intrusiveness involved in the taking of the deposition clearly outweighs the likelihood that the information sought will lead to the discovery of admissible evidence. (Code Civ. Proc., § 2017.020; Emerson Electric Co. v. Superior Court (1997) 16 Cal.4th 1101, 1110-1111.)

IREF has not met this burden. It does not provide any evidence establishing that the burden, expense or intrusiveness of a further day of deposition for each of these three witnesses clearly outweighs Pfizer’s need to discover information concerning the basis for IREF’s damages theories and any additional activities impacting the experts’ qualifications and credibility. Therefore, a protective order precluding the further depositions of Sam Teichman, Jimmy Jackson and Alan Hobbs is unwarranted.

            C. Order Precluding Responses to SI

IREF contends that good cause does not exist for the SI as Pfizer has already propounded 220 special interrogatories and Pfizer has not established that additional interrogatories are necessary. IREF also contends that Pfizer’s declaration of necessity is not code-compliant as the declaration does not indicate the reason why additional interrogatories are necessary.

Pfizer argues that it has propounded only an additional eight narrowly-tailored interrogatories relating to the new damages theories, evidence and witnesses IREF intends to produce at the new trial, and IREF’s theories of agency and conspiracy. It contends that this information is essential to its preparation for the new trial. In addition, Pfizer argues that the issues in this case are indisputably complex and therefore, the number of special interrogatories is justified.

As an initial matter, the declaration of necessity provided by Pfizer’s counsel is substantially code-compliant. If a party propounds more than 35 specially prepared interrogatories to any party, it must attach a declaration by the propounding party’s attorney, stating, (1) he or she is familiar with the issues and previous discovery in the case, (2) he or she has personally examined each question in the set of interrogatories, (3) the reason the number of questions is warranted, and (4) none of the questions is being propounded for an improper purpose. (Code Civ. Proc., § 2030.050.)

The declaration of necessity provided by Pfizer’s counsel indicates that she is familiar with the issues and previous discovery in the case, has personally examined each question in the set of interrogatories, the number of questions are warranted due to the complexity and the quantity of issues in the case and none of the questions is being propounded for an improper purpose. Therefore, the declaration of necessity is adequate.

With regard to the merits of the motion, as noted above, if a responding party seeks a protective order, the propounding party has the burden of justifying the excess number of interrogatories. (See Code Civ. Proc., § 2030.040, subd. (b).) Here, Pfizer has met this burden.

This case is irrefutably complex. The first jury heard testimony from over 30 witnesses and reviewed hundreds of documents admitted into evidence over the course of a six-week jury trial. (See Meiselas Decl., Ex. E.) After the jury returned a verdict for IREF, in a detailed order, the Court (Hon. Gregory H. Ward) granted a motion for new trial. (See Doolittle Decl., Ex. H.) In a twenty-five page opinion, the Court of Appeal affirmed the Court’s order. (See Doolittle Decl., Ex. I.) In addition, after initially seeking $50 million in the initial trial, IREF has increased its damages request to $900 million in actual damages. (See Doolittle Decl., Ex. J.) Therefore, the complexity and quantity of issues in this case merit extensive discovery.

Given this complexity, Pfizer’s request for responses to the 8 additional interrogatories is justified. All of the SI concern issues not fully investigated prior to the first trial, and are narrowly tailored to address only these new and/or different issues. Accordingly, a protective order precluding responses to the SI is unwarranted.

II. Motion to File Records under Seal

IREF seeks an order sealing Exhibits B, E, and G to the declaration of Ben Meiselas, which consist of the deposition transcripts of its expert, Jimmy Jackson, lodged in support of its motion for protective order, on the ground that the documents contain confidential and trade secret information.

A. Legal Standards

Court records are open to the public unless confidentiality is required by law. (Cal. Rules of Court, rule 2.550(c).) A party may not file a record under seal without a court order, and a court may not permit a record to be filed under seal based solely on the agreement or stipulation of the parties. (Cal. Rules of Court, rule 2.551(a).) The court may order that a record be filed under seal only if it expressly finds facts establishing that: (1) there exists an overriding interest that overcomes the right of public access to the record; (2) the overriding interest supports sealing the record; (3) there exists a substantial probability that the overriding interest will be prejudiced if the record is not sealed; (4) the proposed sealing is narrowly tailored; and (5) no less restrictive means exist to achieve the overriding interest. (Cal. Rules of Court, rule 2.551(d).)

While those rules apply to discovery materials that are used at trial or submitted as a basis for adjudication of matters other than discovery motions or proceedings, they do not apply to “discovery motions” or “records filed or lodged in connection with discovery motions or proceedings.” (Cal. Rules of Court, rule 2.550(a)(3); see also H.B. Fuller Co. v. Doe (2007) 151 Cal.App.4th 879, 893 [given policy favoring broad disclosure during discovery and fact that discovered materials are not part of the court record until filed in connection with a motion or trial, right of public access is “favored neither by tradition nor by functional analysis”]; Mercury Interactive Corp. v. Klein (2007) 158 Cal.App.4th 60, 100 [rationale behind right of public access to civil proceedings does not support generalized presumption of access to all court-filed discovery material].)

Although the sealing rules do not apply to materials filed in connection with discovery motions, the Sixth Appellate District, in dicta, interpreted that exemption as imposing a less stringent standard for sealing in the discovery context, and not as implying an utter lack of limitations. (H.B. Fuller Co. v. Doe, supra, 151 Cal.App.4th at p. 894.) Specifically, a “reasoned decision” regarding the sealing of records must: (1) identify specific information claimed to be entitled to such treatment; (2) identify the nature of the harm threatened by disclosure; and (3) identify and account for any countervailing considerations. (Id.)

B. Analysis

IREF contends that the excerpts of Jimmy Jackson’s deposition testimony contain confidential information concerning its business practices, which would be of value to its competitors. “Courts have found that, under appropriate circumstances, various statutory privileges, trade secrets, and privacy interests, when properly asserted and not waived, may constitute overriding interests” that warrant the filing of records under seal. (In re Providian Credit Card Cases (2002) 96 Cal.App.4th 292, 298, fn. 3.)

Here, IREF has sufficiently identified the information to be filed under seal and the nature of the harm threatened by disclosure. As the presumptive right of public access does not apply in the discovery context and no significant countervailing considerations have been identified, an order sealing these records is warranted.

C. Conclusion

Accordingly, the motion to file records under seal is GRANTED.

Conclusion and Order

IREF’s motion for a protective order precluding further expert depositions and responses to the SI is DENIED.

IREF’s motion to file records under seal is GRANTED