POTTER v. VALEANT PHARMACEUTICALS INTERNATIONAL, INC. et al

RESPONSE in Opposition

D.N.J.November 5, 2018

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY IN RE VALEANT PHARMACEUTICALS INTERNATIONAL, INC. SECURITIES LITIGATION : : : : : : : : Master No. 3:15-cv-07658 (MAS) (LHG) CLASS ACTION PHILIDOR RX SERVICES’ AND RELATED PHILIDOR ENTITIES’ RESPONSE IN OPPOSITION TO MOTION TO COMPEL POLSINELLI PC Jason A. Nagi Dmitry Shifrin (Pro Hac Vice) Thomas H. Wagner (Pro Hac Vice) 600 Third Avenue, 42 nd Floor New York, NY 10016 (212) 644-2092 jnagi@polsinelli.com Attorneys for Philidor RX and (1) Back Rank, LLC; (2) BQ6 Media; (3) Brighton Way Pharmacy d/b/a West Wilshire Pharmacy; (4) Caissa Ventures, LLC; (5) End Game Partnership, LP; (6) Isolani, LLC; (7) Lucena Holdings; (8) MRM Holdings, LLC; (9) Prescription Shoppe Inc. of Orangeburg; (10) Safe RX Pharmacy / RAAS Pharmacy; (11) 64 Squares, LLC; (12) B&W Pharmacies; (13) C-K Pharmacies, LLC; (14) ELO Pharmacy, LLC; (15) En Passant, LLC; (16) En Prise, LLC; (17) Fifty Moves, LLC; (18) First Rank Pharmacies, LLC; (19) Forced Move, LLC; (20) Gambit, LLC; (21) GM3000 Pharmacies, LLC; (22) Interpose Ventures, LLC; (23) Knight & Knight Pharmacies, LLC; (24) Kotov Rx Holdings, LLC; (25) Lasker Pharmacies, LLC; (26) MitroDef, LLC; (27) NC3 Pharmacy Holdings, LLC; (28) O-O Enterprises, LLC; (29) Opening Move, LLC; (30) Tabia Holdings, LLC; (31) Tarrasch Pharmacy Holdings, LLC; (32) White Square Holdings, LLC; (33) Zeitnot, LLC; and (34) Zugzwang, LLC. Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 1 of 20 PageID: 12308 i TABLE OF CONTENTS I. INTRODUCTION ........................................................................................ 1 II. PROCEDURAL BACKGROUND ............................................................... 2 III. ARGUMENT................................................................................................ 5 A. NO MOTION TO QUASH IS NECESSARY ..................................... 5 B. CONTINUED STAY OF PHILIDOR DISCOVERY IS APPROPRIATE ................................................................................. 6 C. THE SUBPOENAS SHOULD BE STAYED TO AVOID AN PLACING AN UNDUE BURDEN ON PHILIDOR ......................... 12 1. Plaintiffs have no need for immediate production by Philidor. 13 2. The nature of the litigation does not warrant immediate production by Philidor. ........................................................... 14 3. The burden on Philidor and Andrew Davenport to respond now would be significant. ............................................................... 15 IV. CONCLUSION .......................................................................................... 15 Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 2 of 20 PageID: 12309 ii TABLE OF AUTHORITIES Page(s) Cases Baxter v. Palmigiano, 425 U.S. 308 (1976) ......................................................................................... 10 In re Centrix Fin., LLC, 2012 WL 6625920 (D.N.J. Dec. 18, 2012) ................................................. 12, 14 Chazanow v. Sussex Bank, 2014 WL 2965697 (D.N.J. July 1, 2014) ................................................... 12, 14 Disability Rights New Jersey v. New Jersey Dept. of Ed., 2011 WL 4478788 (D.N.J. Sept. 26, 2011) ...................................................... 12 Edwards v. Serrecchia, Case No. 15-3569 (PGS), slip op. at 1 (D.N.J. Aug. 18, 2016) ....................... 8, 9 Kelley v. Enhanced Recovery Co., LLC, 2016 WL 8673055 (D.N.J. Oct. 7, 2016) ......................................................... 14 Landis v. North Am. Co., 299 U.S. 248 (1936) ........................................................................................... 7 Nye v. Ingersoll Rand Co., 2011 WL 253957 (D.N.J. Jan. 25, 2011) .................................................... 12, 13 Peterson v. Matlock, 2011 WL 5416571 (D.N.J. Nov. 7, 2011) .......................................................... 8 Seeman v. Locane, 2015 WL 5822806, *1 (D.N.J. Oct. 1, 2015).................................................. 8, 9 Stamy v. Packer, 138 F.R.D. 412 (D.N.J. 1990) .......................................................................... 12 Texaco, Inc. v. Borda, 383 F.2d 607 (3d Cir. 1967) ............................................................................... 7 Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 3 of 20 PageID: 12310 iii Trustees of Plumbers & Pipefitters Nat’l Pension Fund v. Transworld Mechanical, Inc., 886 F. Supp. 1134 (S.D.N.Y. 1995) ................................................................... 7 United States v. Kordel, 397 U.S. 1 (1970)............................................................................................... 7 Walker v. County of Gloucester, 2016 WL 1725942 (D.N.J. April 28, 2016) ........................................................ 8 Walsh Secs. v. Cristo Prop. Mgmt., 7 F. Supp. 2d 523 (D.N.J. 1998)........................................................... 7, 8, 9, 10 Statutes Private Securities Litigation Reform Act .................................................... 6, 10, 15 Racketeer Influenced and Corrupt Organizations Act. ............................................ 3 Other Authorities U.S. Const. amend. V.............................................................................. 7, 8, 10, 11 Fed. R. Civ. P. 26(b)(C)(i) .................................................................................... 13 Fed. R. Civ. P. 34 .................................................................................................. 14 Fed. R. Civ. P. 45 .............................................................................................. 5, 12 Fed. R. Civ. P. 45(d) ......................................................................................... 5, 12 Federal Rule of Criminal Procedure 16(b) .............................................................. 7 Milton Pollack, Parallel Civil and Criminal Proceedings ................................. 9, 11 Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 4 of 20 PageID: 12311 1 Philidor Rx Services, LLC and related entities 1 (collectively, “Philidor”), through counsel, submit the following response in opposition to the Motion to Compel Non-Party Philidor RX Services, LLC and Philidor Network Entities to Produce Documents in Response to Subpoenas (the “Motion to Compel”) (Doc. 386): I. INTRODUCTION Plaintiffs’ Motion to Compel should be denied. First, Plaintiffs assert that Philidor should have filed a motion to quash the subpoenas, but Plaintiffs put format over substance. Most notably, they overlook the unique procedural posture of this dispute. And when the history of this dispute is considered, it is clear that Philidor need not have filed a motion to quash to bring this matter before the Court because the Court has actively managed this issue from the beginning. Second, the stay of proceedings in In re Valeant Pharmaceuticals International, Inc. Third-Party Payor Litig., No. 3:16-cv-3087 (MAS) (LHG) (D.N.J.) (the “TPP Litigation”) remains in place and it should remain in place until the conclusion of the criminal case against Andrew Davenport and Gary Tanner, 1 (1) Back Rank, LLC; (2) BQ6 Media; (3) Brighton Way Pharmacy d/b/a West Wilshire Pharmacy; (4) Caissa Ventures, LLC; (5) End Game Partnership, LP; (6) Isolani, LLC; (7) Lucena Holdings; (8) MRM Holdings, LLC; (9) Prescription Shoppe Inc. of Orangeburg; (10) Safe RX Pharmacy / RAAS Pharmacy; (11) 64 Squares, LLC; (12) B&W Pharmacies; (13) C-K Pharmacies, LLC; (14) ELO Pharmacy, LLC; (15) En Passant, LLC; (16) En Prise, LLC; (17) Fifty Moves, LLC; (18) First Rank Pharmacies, LLC; (19) Forced Move, LLC; (20) Gambit, LLC; (21) GM3000 Pharmacies, LLC; (22) Interpose Ventures, LLC; (23) Knight & Knight Pharmacies, LLC; (24) Kotov Rx Holdings, LLC; (25) Lasker Pharmacies, LLC; (26) MitroDef, LLC; (27) NC3 Pharmacy Holdings, LLC; (28) O-O Enterprises, LLC; (29) Opening Move, LLC; (30) Tabia Holdings, LLC; (31) Tarrasch Pharmacy Holdings, LLC; (32) White Square Holdings, LLC; (33) Zeitnot, LLC; and (34) Zugzwang, LLC. Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 5 of 20 PageID: 12312 2 United States v. Tanner, et al., No. 1:17-cr-61 (S.D.N.Y.) (the “Criminal Matter”), including all appeals. Compelling Philidor to respond to Plaintiffs’ burdensome subpoenas would create the same risk of prejudice to Andrew Davenport and Philidor that allowing discovery to proceed in the TPP Litigation would create. Moreover, it would create the risk of expensive and inefficient duplicative discovery to stay the TPP Litigation, while compelling Philidor to provide discovery now to Plaintiffs in this matter. Third, Plaintiffs’ subpoenas are unduly burdensome. Plaintiffs allege that Valeant Pharmaceuticals International, Inc., (“Valeant”) has access to documents from Philidor and that Valeant effectively controls Philidor. Valeant may disagree with Plaintiffs’ assertions, but since discovery from Valeant is not stayed, Plaintiffs can simply obtain documents they allege to exist from Valeant without forcing Philidor to incur the burden of responding separately to the subpoenas. II. PROCEDURAL BACKGROUND2 Plaintiffs filed this case on October 22, 2015, and moved for leave to issue an expedited subpoena to Philidor on November 19, 2015. The Court granted the motion for leave on December 3, 2015, but later vacated the December 3, 2015 2 Philidor is a defendant in the TPP Litigation, but is not a party in this case. Philidor was a privately held company until it ceased doing business in October 2015. While in operation, Philidor sold primarily Valeant-branded prescription drugs, and handled insurance claims for customers. As relevant here, Andrew Davenport served as the CEO of Philidor until it ceased operations. The Court is presumably familiar with the factual allegations, so except for these few salient allegations, Philidor will provide only a review of the relevant procedural history. Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 6 of 20 PageID: 12313 3 Order after the defendants moved for reconsideration. The Court thus stayed enforcement of the subpoena Plaintiffs had served on Philidor. (Doc. 143.) After the Court mostly denied the defendants’ motions to dismiss on April 28, 2017 (Doc. 217), Plaintiffs requested that Philidor begin production of documents in response to the previously served subpoena. Plaintiffs also issued more subpoenas to other entities affiliated with Philidor between June and August 2017. Philidor objected to the subpoenas, however, because of the risks of prejudice and duplicative discovery caused by the overlap between the allegations in this case, the TPP Litigation, and the Criminal Matter. 3 Indeed, the defendants in the TPP Litigation had moved in March 2017 to stay the TPP Litigation to prevent prejudice, duplication, and confusion. [See TPP Litigation Docs. 55 & 56.] The plaintiffs in that case opposed a stay, but the Court granted the defendants’ motions to stay on August 9, 2017 holding that “[a]ll proceedings in this case are stayed until the conclusion of the [Criminal Matter], or until the Court lifts the stay.” [TPP Litigation Doc. 74 at 1-2.] In light of the stay of the TPP Litigation, the Court also queried whether to stay this case. 3 The Indictment in the Criminal Matter alleged that Andrew Davenport and Gary Tanner conspired to induce Valeant to buy an option to purchase Philidor, and that Andrew Davenport and Gary Tanner benefitted financially from this option to Valeant’s detriment. The TPP Complaint names Andrew Davenport as a defendant and alleges that Valeant, through Gary Tanner, conspired with Andrew Davenport and Philidor to defraud a group of third-party payors in violation of the Racketeer Influenced and Corrupt Organizations Act. Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 7 of 20 PageID: 12314 4 Thus, Plaintiffs and Philidor provided a joint submission on October 13, 2017 regarding the Philidor subpoenas issued by Plaintiffs. Notwithstanding the stay of the TPP Litigation, Plaintiffs sought to enforce the subpoenas. Philidor argued that staying enforcement of the subpoenas issued in this case was warranted for the same reason the Court issued a stay of all proceedings in the TPP Litigation, i.e., to prevent prejudice and duplication of discovery. The Court issued an order on October 19, 2017 to show cause why this case (and others involving Valeant) should not be stayed in light of the Criminal Matter and the stay of the TPP Litigation. (Doc. 273.) The Court subsequently entered an order on November 29, 2017 staying “[a]ll proceedings and discovery” in this case, excluding briefing and resolution of pending motions to dismiss and the plaintiffs’ requests for production to Valeant and Defendant PricewaterhouseCoopers LLP. Thus, compliance with the subpoenas issued to Philidor was stayed until conclusion of the trial in the Criminal Matter. (Doc. 291.) In May 2018, a jury convicted Andrew Davenport and Gary Tanner in the Criminal Matter and on June 5, 2018, the Court lifted the stay of this action. (Doc. 316.) The Court did not, however, lift the stay of the TPP Litigation and it was not until September 28, 2018 that the Court asked for the parties’ positions on whether the TPP Litigation should remain stayed. (TPP Litigation Doc. 90.) Philidor and Andrew Davenport submitted a timely Motion to Continue the Stay Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 8 of 20 PageID: 12315 5 on October 12, 2018. (TPP Litigation Doc. 91.) Plaintiffs have submitted opposition papers to the motion to continue (TPP Litigation Doc. 93), and Philidor and Andres Davenport submitted a reply brief in support of their motion to continue. (TPP Litigation Doc. 95.) Valeant indicated that it takes no position on whether to continue the stay of the TPP Litigation. (TPP Litigation Doc. 94). On October 30, 2018, Andrew Davenport and Gary Tanner were sentenced in connection with the Criminal Matter. Both gentlemen have indicated they will appeal their convictions. As of the filing of this response brief, the TPP Litigation remains stayed. III. ARGUMENT A. NO MOTION TO QUASH IS NECESSARY Plaintiffs assert Philidor should be compelled to immediately respond to the subpoenas because Philidor did not file a motion to quash the subpoenas. Plaintiffs are incorrect and their position ignores the procedural history of this dispute. While it may be true that Fed. R. Civ. P. 45 contemplates the filing of a motion to quash, the history of this dispute is more complex than a typical subpoena-and-response scenario envisioned by Fed. R. Civ. P. 45(d). Philidor and Plaintiffs have been at odds over the subpoenas for some time and the Court has actively managed the issue since the beginning of the dispute and Philidor is not playing procedural “gotcha.” Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 9 of 20 PageID: 12316 6 Indeed, the Court previously stayed this case under the PSLRA and then stayed it again to prevent the prejudice and duplication that would result if the subpoenas were enforced prior to the conclusion of the Criminal Matter. When trial in the Criminal Matter concluded and the parties in this case requested the Court lift the stay, the parties did not address the Philidor subpoenas in their request. Likewise, the Court’s June 5, 2018 Order lifting the stay does not address the subpoenas. It was not until Plaintiffs requested permission to brief the issue that compliance with the subpoenas came up again. Plaintiffs cannot, on the one hand, request leave to brief an issue and then, on the other hand, say that Philidor should have requested to brief the issue. This dispute is properly before the Court regardless of whether Philidor filed a motion to quash. And given the unique procedural posture of this case and the related TPP Litigation, Philidor submits that the Court should reject Plaintiffs’ form-over-substance argument. B. CONTINUED STAY OF PHILIDOR DISCOVERY IS APPROPRIATE Plaintiffs also assert that a continued stay of discovery from Philidor is unwarranted after the conclusion of the trial in the Criminal Matter. Plaintiffs are incorrect and lifting the stay would render the subpoenas unduly burdensome by creating the risk of prejudice and duplicative discovery. Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 10 of 20 PageID: 12317 7 Trial courts have significant discretion to manage their dockets and stay proceedings when circumstances require it. See United States v. Kordel, 397 U.S. 1, 12 n. 27 (1970) (noting that courts “have deferred civil proceedings pending the completion of parallel criminal prosecutions when the interests of justice seemed to require such action”); Landis v. North Am. Co., 299 U.S. 248, 254-55 (1936) (“the power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with the economy of time and effort for itself, for counsel, and for litigants”); Texaco, Inc. v. Borda, 383 F.2d 607, 608 (3d Cir. 1967) (affirming stay in civil case pending determination of parallel criminal proceeding); Walsh Secs. v. Cristo Prop. Mgmt., 7 F. Supp. 2d 523, 526 (D.N.J. 1998) (granting stay of civil proceedings). Courts have thus stayed civil cases when parallel criminal proceedings exist “because the denial of a stay could impair a party’s Fifth Amendment privilege against self-incrimination, extend criminal discovery beyond the limits set forth in Federal Rule of Criminal Procedure 16(b), expose the defense’s theory to the prosecution in advance of trial, or otherwise prejudice the criminal case.” Trustees of Plumbers & Pipefitters Nat’l Pension Fund v. Transworld Mechanical, Inc., 886 F. Supp. 1134, 1138 (S.D.N.Y. 1995) (cited with approval in Walsh). In this district, “[t]he factors to be considered in deciding whether to grant a stay include: Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 11 of 20 PageID: 12318 8 1) the extent to which the issues in the criminal and civil cases overlap; 2) the status of the case, including whether the defendants have been indicted; 3) the plaintiff's interest in proceeding expeditiously weighed against the prejudice to plaintiff caused by a delay; 4) the private interests of and burden on defendants; 5) the interests of the court; and 6) the public interest.” Walsh, 7 F. Supp. 2d at 526-27 (hereafter, the “Walsh factors”); see also Walker v. County of Gloucester, 2016 WL 1725942, *1 (D.N.J. April 28, 2016) (referring to Walsh factors); Peterson v. Matlock, 2011 WL 5416571, *2 (D.N.J. Nov. 7, 2011) (same). As relevant here, courts in this district have also held that a stay of civil proceedings pending the appeal of a guilty verdict is appropriate. For example, in Seeman v. Locane, this Court stayed discovery as to the defendant, Amy Locane, pending the completion of Ms. Locane’s criminal trial. See Case No. 10-6597, 2015 WL 5822806, *1 (D.N.J. Oct. 1, 2015). After she was found guilty of manslaughter, the Court lifted the stay in the civil case, but while the civil matter was in discovery, Ms. Locane appealed her criminal conviction and sought a stay of her deposition so as not to compromise her Fifth Amendment rights. In granting the request, this Court noted that Ms. Locane faced the possibility of a retrial. The Court thus ordered the parties to continue with limited discovery that would not affect Ms. Locane’s Fifth Amendment rights. Similarly, in Edwards v. Serrecchia, the plaintiff was tried and convicted of criminal charges, but the conviction was Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 12 of 20 PageID: 12319 9 overturned on appeal. This Court granted the plaintiff’s request to stay the civil action because the State was pursuing a new trial against him. See Case No. 15- 3569 (PGS), slip op. at 1 (D.N.J. Aug. 18, 2016). Applying the law above to the facts of this case indicates a continuation of the existing stay is warranted until the conclusion of appellate proceedings in the Criminal Matter. First, there is still overlap between the issues in this case, the TPP Litigation, and the Criminal Matter. (See TPP Litigation Doc. 55-1 at 9-10 (describing overlap in issues).) That overlap is the most important factor in deciding whether a stay of civil proceedings is appropriate. Walsh, 7 F. Supp. 2d at 527 (citing and quoting Milton Pollack, Parallel Civil and Criminal Proceedings, 129 F.R.D. 201, 203 (1989) (hereafter “Parallel Proceedings”)). Second, the status of the criminal proceedings supports a continuation of the stay of the civil case. Andrew Davenport is likely to appeal and thus, may still be subject to retrial. In situations like this, this Court has held that a stay of some discovery is appropriate. See Seeman, 2015 WL 5822806 (granting partial stay pending appeal of criminal conviction). Third, any prejudice to Plaintiffs caused by continuing the stay of this case will be minimal. Most notably, Plaintiffs can still conduct discovery from Valeant and the other parties (and other non-Philidor non-parties). Plaintiffs have already Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 13 of 20 PageID: 12320 10 alleged they can obtain from Valeant much of the information they seek from Philidor because Valeant has access to the documents at issue. Philidor is also not asking for a stay of dispositive motions briefing or other activity in the case. Indeed, Plaintiffs recently filed an amended complaint and the case is progressing notwithstanding the stay of enforcement of the Philidor subpoenas. Moreover, the initial stay of the proceedings in this case was not caused by Philidor, but instead was a result of the mandatory stay under PSLRA. Thus, Plaintiffs cannot lay blame on Philidor the initial delay of this case. Any prejudice to Plaintiffs is minimal and, as Walsh explains, “delays in civil cases are fairly common.” Walsh, 7 F. Supp. 2d at 528. Contrary to Plaintiffs’ assertion, a stay of the Philidor subpoenas pending the resolution of all appeals in the Criminal Matter will not be “indefinite.” Andrew Davenport and Gary Tanner have been sentenced and the clock is ticking on their appellate options. Fourth, the burdens on Philidor of litigating in a civil forum are significant because “the Fifth Amendment does not forbid adverse inferences against parties to civil actions when they refuse to testify in response to probative evidence offered against them: the Amendment does not preclude the inference where the privilege is claimed by a party to a civil cause.” Baxter v. Palmigiano, 425 U.S. 308, 318-19 (1976). While the subpoenas do not name Andrew Davenport directly, Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 14 of 20 PageID: 12321 11 they will impact his ability to defend himself in continued civil and criminal proceedings. Andrew Davenport should not be compelled to choose between waiving his Fifth Amendment rights and defending himself in the civil lawsuit or asserting the privilege and risking an adverse inference in the civil case. Even if no adverse inference arises from Andrew Davenport’s assertion of his Fifth Amendment rights, he risks the possibility that non-disclosure of information in the civil case will jeopardize his ability to defend himself on appeal. See Parallel Proceedings, 129 F.R.D. at 205-06 (noting that courts in civil matters can exclude evidence withheld by party on Fifth Amendment grounds). Fifth, the interests of judicial efficiency support continuing the stay. Given the status of the Criminal Matter and the potential for appeal, there is a possibility that even if the stay is lifted now, it will be re-imposed at a later date. To avoid the problems that will arise with start-stop discovery, Philidor asks that the stay remain in place for now. Keeping the status quo will reduce the need for briefing in this case each time a new development in the Criminal Matter requires an adjust to the status of discovery in this case. Sixth and finally, the public’s interest, if any, in achieving expeditious resolution of the civil proceeding does not outweigh the harm to defendants if a stay is not continued. Id. at 529. There is no compelling public interest here that justifies denial of a stay. Plaintiffs seek only money damages and Plaintiffs have Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 15 of 20 PageID: 12322 12 already acknowledged that the bulk of the harm they seek to address in this case ceased because Philidor ceased doing business in 2015. Thus, there is no ongoing injury that Plaintiffs seek to cure on behalf of the public. C. THE SUBPOENAS SHOULD BE STAYED TO AVOID PLACING AN UNDUE BURDEN ON PHILIDOR Rule 45 states that courts should modify or quash a subpoena when the subpoena imposes an undue burden on the responding party. Fed. R. Civ. P. 45(d). See also Stamy v. Packer, 138 F.R.D. 412, 419 (D.N.J. 1990); In re Centrix Fin., LLC, 2012 WL 6625920, at *6 (D.N.J. Dec. 18, 2012) (explaining that even if non- party has interest in litigation, non-party still entitled to heightened protection against unduly burdensome discovery under Fed. R. Civ. P 45). “An undue burden exists when the subpoena is ‘unreasonable or oppressive’” Disability Rights New Jersey v. New Jersey Dept. of Ed., 2011 WL 4478788, *8 (D.N.J. Sept. 26, 2011). While there is no “strict definition of unreasonable or oppressive,” courts in this district analyze seven factors to determine whether a subpoena should be modified or quashed: (1) the party’s need for the production; (2) the nature and importance of the litigation; (3) relevance; (4) the breadth of the request for the production; (5) the time period covered by the request; (6) the particularity with which the documents are described; and (7) the burden imposed on the subpoenaed entity. Id. see also Chazanow v. Sussex Bank, 2014 WL 2965697, *2-*3 (D.N.J. July 1, 2014) (granting motion to quash subpoenas); Nye v. Ingersoll Rand Co., 2011 WL Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 16 of 20 PageID: 12323 13 253957, *6 (D.N.J. Jan. 25, 2011) (approving of order modifying and quashing subpoenas). It is the responding party’s burden to show undue burden, but courts do not require the responding party to put forth “documentary evidence of the specific cost or burden of production where a subpoena is facially overbroad or the information sought is irrelevant, privileged, or more readily obtainable from other sources.” Nye, 2011 WL 253957 at *6 (emphasis added). Application of the relevant factors in this case shows why it is appropriate to continue the deadline for Philidor to respond until the conclusion of all appeals in the Criminal Matter. 1. Plaintiffs have no need for immediate production by Philidor. The first factor asks whether the party issuing the subpoena has a need for the documents requested in the subpoena. See Nye, 2011 WL 253957 at *6. When information in a subpoena is available from another source, the party issuing the subpoena has no need to put the recipient through the burden of responding to the subpoena. See id.; see also Fed. R. Civ. P. 26(b)(C)(i) (court “must limit the frequency and extent of discovery” if it determines that “the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive”). Indeed, courts in this district routinely hold that “[d]iscovery from a nonparty is unduly burdensome where the information sought has already been, or can be obtained from other Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 17 of 20 PageID: 12324 14 means.” Kelley v. Enhanced Recovery Co., LLC, 2016 WL 8673055, *2 (D.N.J. Oct. 7, 2016); (granting motion to quash subpoena); In re Centrix Fin., LLC, 2012 WL 6625920, *6 (D.N.J. Dec. 18, 2012) (quashing subpoenas in part because information was already available to defendants). In this case, Plaintiffs have not shown they need documents immediately from Philidor because Plaintiffs have alleged they can obtain similar documentation from Valeant. Plaintiffs assert in their Motion to Compel that Valeant controls Philidor and Valeant has access to the documents Plaintiffs seek from Philidor in their subpoenas. Valeant may dispute those allegations, but if they are true, Plaintiffs can simply issue a discovery request under Fed. R. Civ. P. 34 to Valeant. There is no need to subject Philidor to the burden of producing documents that Plaintiffs can already obtain from another, less burdensome source. 4 2. The nature of the litigation does not warrant immediate production by Philidor. The second factor examines the “nature and importance of the litigation.” Chazanow, 2014 WL 2965697, *2-*3. In this instance, the litigation is one for money damages. Philidor has ceased business operations and there are no issues of ongoing fraud or wrongful behavior that require immediate discovery from Philidor. Moreover, while Plaintiffs correctly assert this litigation has been pending 4 Assuming arguendo that Plaintiffs cannot obtain documents from Valeant, the Court can assess at that point whether subpoenas to Philidor are necessary. Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 18 of 20 PageID: 12325 15 for nearly three years, it has not been stayed solely at Philidor’s request. On the contrary, the case was stayed for over one year per the PSLRA. And the matter has progressed in spite of the multiple stays of discovery. For example, Plaintiffs have just recently sought to amend their complaint in this matter. Thus, there is no compelling reason to compel immediate production by Philidor. 3. The burden on Philidor and Andrew Davenport to respond now would be significant. For the reasons noted above, requiring Philidor to respond to the subpoenas now would impose a significant risk to Philidor and Andrew Davenport. It would also create a high likelihood of wasteful, duplicative discovery because Philidor may have to produce similar information to the plaintiffs in the TPP Litigation at a later date, after the stay of the TPP Litigation is lifted. IV. CONCLUSION Requiring Philidor to respond to the subpoenas now would create an unfair risk of prejudice to Philidor and Andrew Davenport. It would also be inconsistent with the stay of the TPP Litigation and would increase the likelihood of duplicative discovery. Thus, for the reasons above, Philidor requests that the Motion to Compel be denied and that the subpoenas be modified by extending the deadline to respond until the conclusion of the Criminal Matter, including all appeals. Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 19 of 20 PageID: 12326 16 Dated: New York, New York November 5, 2018 Respectfully submitted, POLSINELLI PC By: /s/ Jason A. Nagi Jason A. Nagi Dmitry Shifrin (Pro Hac Vice) Thomas H. Wagner (Pro Hac Vice) 600 Third Avenue, 42 nd Floor New York, New York 10016 (212) 644-2092 jnagi@polsinelli.com Attorneys for Defendants Philidor RX Services and Related Philidor Entities Case 3:15-cv-07658-MAS-LHG Document 391 Filed 11/05/18 Page 20 of 20 PageID: 12327