Kaiser Foundation Health Plan Inc v. Merck & Company Inc. et al

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United States District Court
Northern District of California
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
KAISER FOUNDATION HEALTH PLAN
INC.,
Plaintiff,
v.
MERCK & COMPANY INC., et al.,
Defendants.
Case No. 21-cv-05497-HSG (LJC)
ORDER REGARDING JOINT
DISCOVERY LETTER CONCERNING
DEPOSITIONS SOUGHT BY KAISER
ECF No. 113
The parties in this antitrust action filed a joint discovery letter in which Plaintiff Kaiser
Foundation Health Plan, Inc. (“Kaiser”) seeks certain depositions pursuant to Rules 30(b)(1) and
30(b)(6) of the Federal Rules of Civil Procedure, while Defendants Merck & Co., Inc., Merck
Sharpe & Dohme Corp., Shering-Plough Corp., Shering Corp., and MSP Singapore Co. LLC
(collectively, “Merck”) oppose their requests. Specifically, Kaiser seeks a 30(b)(6) deposition of
Merck, and 30(b)(1) depositions of Paul McCrorey and Glen Firestone, two former Merck
employees. Merck argues that because this action was remanded from a multidistrict litigation in
the Eastern District of Virginia and given the discovery conducted during that MDL, Kaiser
should not be permitted to pursue additional depositions. In addition, Merck argues that Kaiser
should be precluded from conducting the two 30(b)(1) depositions because they would be
duplicative of the topics covered by Kaiser’s 30(b)(6) deposition. Having considered the parties’
joint letter, ECF No. 113, and the relevant record and authorities, the Court GRANTS IN PART
AND DENIES IN PART Kaiser’s request.
I. BACKGROUND
Kaiser originally filed this action in San Francisco County Superior Court on June 4, 2021.
ECF No. 1 at 2. Thereafter the action was removed to this district, and within a matter of weeks,
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United
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Northern District of California
transferred to the Eastern District of Virginia and assigned to a multi-district litigation, In re Zetia
(Ezetimibe) Antitrust Litigation, 2:18-md-02836. In re Zetia had commenced in 2018 when the
Judicial Panel on Multidistrict Litigation (“the Panel”) issued a transfer order pursuant to 28
U.S.C. § 1407, centralizing a number of cases regarding a cholesterol medication, Zetia. The
Panel found, over the defendant pharmaceutical companies’ objections, that a set of cases involved
common questions of fact and centralization of in the Eastern District of Virginia would serve the
convenience of the parties and witnesses and promote the just and efficient conduct of the
litigation. In re Zetia, ECF No. 1 at 1. The Panel reasoned, “The actions share factual issues
arising from allegations that defendants engaged in an unlawful scheme to delay the introduction
of generic competitors to Merck’s cholesterol drug Zetia.” Id. Furthermore, the issues involved
“appear[ed] complex, and likely to require significant discovery.” Id. “Centralization would
avoid duplication of that discovery, as well as eliminate the potential for inconsistent rulings on
class certification and other pretrial matters.” Id.
In 2021, when Kaiser’s action was assigned to the MDL, the transferee court permitted
Kaiser and the other plaintiff end-payors of Zetia to seek a modification of pertinent pretrial
orders, including, among other orders, a joint stipulated protocol governing privilege and the
discovery of electronically stored information and a briefing schedule for dispositive motions. In
re Zetia, ECF Nos. 172, 1348 at 2. In its response, Kaiser represented that it “intend[ed] to opt-out
of the end-payor class at the appropriate time,” and that Kaiser and the other plaintiff end-payors
“filed their respective actions to assert their independent claims.” In re Zetia, ECF No. 1397 at 1-
2. Kaiser expressly declined to seek relief from the procedural orders issued in the MDL, though
it sought confirmation that the deadlines for dispositive motion briefing did not apply to it. Id. at
2. At that time, the Direct Purchaser Class, End-Payor Class, and Retailer actions had already
completed summary judgment briefing. Id.
From the commencement of the MDL in June 2018 until 2023, the transferee court
conducted coordinated and consolidated proceedings that resulted in the resolution of twenty-one
of twenty-five centralized actions. Kaiser v. Merck, 21-cv-5497, ECF No. 18-1 at 1 (N.D. Cal.
Dec. 12, 2023). The plaintiffs in the four cases that were not resolved (the Opt-Out Plaintiffs),
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including Kaiser, again represented to the transferee court at a status conference in the lead-up to
the consolidated trial that they would not proceed in that trial and would instead seek remand to
their respective home jurisdictions, following the resolution of the pre-trial matters, and Kaiser
filed notice of its formal intent to remand. Id. at 3.
Judge Beach Smith, the presiding judge in the MDL, issued a suggestion of remand as to
the four cases that remained. She explained:
Section 1407 was not intended to require the transferee judge to
“necessarily complete all pretrial proceedings in all actions
transferred and assigned to [them] by the Panel. . . .” In re Evergreen
Valley Project Litig., 435 F. Supp. 923, 924 (J.P.M.L. 1977). Rather,
the role of the transferee judge is to complete pretrial proceedings to
the point that “the central purpose of the [Panel’s] referral has been
achieved.” In re Activated Carbon-Based Hunting Clothing Mktg.
and Sales Pracs. Litig., 840 F. Supp. 2d 1191, 1201 (D. Minn. 2012)
(internal citations omitted).
Id. at 6. Judge Beach Smith observed that the Opt-Out Plaintiffs’ Vytorin claims were “separate
and substantially different from the claims of the Plaintiffs who participated in the consolidated
trial.” Id. at 5. Furthermore, motions to dismiss the Opt-Out Plaintiffs’ claims had been filed, and
Judge Beach Smith noted that their resolution “may result in substantial additional discovery.” Id.
Ultimately, on December 12, 2023, the Panel issued a conditional remand order, transferring
Kaiser’s action back to this district. ECF No. 18. Motions to dismiss filed by the Out-Out
Plaintiffs, including Kaiser, in the MDL were not adjudicated there. However, Merck challenged
Kaiser’s pleadings after remand, filing motions to dismiss here. ECF Nos. 60, 83. Kaiser has
opposed those motions and sought discovery. See ECF Nos. 61, 83, 86.
II. ANALYSIS
Merck argues that the limits established in Rule 30(a) of the Federal Rules of Civil
Procedure should apply to this action following remand from In re Zetia. Merck argues that this
action is a continuation of the proceedings in In re Zetia and “allowing parties to re-do depositions
after remand from an MDL would defeat the entire purpose of MDL proceedings.” ECF No. 113
at 5. Kaiser does not dispute that it has received all of the discovery from In re Zetia, including
the deposition transcripts. Merck asserts that many of the depositions taken during In re Zetia of
Merck and Merck witnesses “included questioning about Vytorin.” Id. at 4.
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Rule 30 addresses depositions, and among other guardrails, it sets a presumptive limit of
ten depositions by the plaintiffs, the defendants, or by third party defendants, and restricts repeat
depositions of a deponent who has already been deposed in the action. Fed. R. Civ. P.
30(a)(2)(A)(i)-(ii). The parties must either stipulate to an additional deposition or obtain “leave of
court” for the deposition to occur. Id. Where a party seeks leave to take a deposition, “the court
must grant leave to the extent consistent with Rule 26(b)(1) and (2).” Fed. R. Civ. P. 30(a)(2).
Kaiser does not dispute that more than ten depositions were taken and McCrorey was deposed in
the MDL.
Merck relies in part on Section 1407. Section 1407(a) authorizes the Panel to centralize
actions with “one or more common questions of fact” in one district for “coordinated or
consolidated pretrial proceedings,” but the transferee court need not complete the entirety of
pretrial proceedings for these centralized actions, let alone complete the entirety of discovery that
may pertain to the claims of any party in the MDL. The statute allows the Panel to remand the
actions “at or before the conclusion of such pretrial proceedings to the district from which it was
transferred.” 28 U.S.C. § 1407(a) (emphasis added). Thus, the plain language of the statute
contemplates that discovery after remand from an MDL may be necessary, depending on the
circumstances.
The litigation history in In re Zetia weighs heavily against Merck’s call to apply the Rule
30(a) limits here. The transferee court recognized the likelihood of “substantial additional
discovery” if the Opt-Out Plaintiffs’ actions were to survive the motions to dismiss. ECF No. 18-
1 at 5. The transferee court pointed out that the Opt-Out Plaintiffs’ Vytorin claims were separate
from and substantially different from the claims that were to be the focus of the consolidated trial.
Judge Gilliam has recently ruled on Merck’s motion to dismiss Kaiser’s Second Amended
Complaint, and the cognizable claims concerning Vytorin have been identified. Merck’s
generalized representation that many of the MDL depositions of Merck 30(b)(6) deponents and
Merck witnesses included questioning about Vytorin does not, unto itself, obviate the need for
further depositions to gather testimony more directly relevant to the particular claims that Kaiser is
now pursuing and the defenses that Merck may raise. Kaiser’s claims are “substantially different”
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from the claims about Zetia, a different drug manufactured by Merck, though both drugs share the
same active ingredient. Id. The MDL filings that Merck points to do not indicate that Kaiser
intended to waive further discovery following remand and rely solely on discovery from the MDL.
Imposing presumptive discovery limits in a manner that automatically counts the MDL discovery
against Kaiser and shifting the burden to Kaiser to justify further discovery after remand is
unwarranted where Kaiser has demonstrated its claims were not included in the MDL and the
transferee court characterized those claims as substantially different and likely to warrant
substantial discovery if the claims were to proceed past the pleading stage. Subject to the
principles set forth in Rule 26 of the Federal Rules of Civil Procedure, Kaiser make take additional
depositions and redepose individuals who were deposed in the MDL. See Fed. R. Civ. P. 26(c)
(“The court may, for good cause, issue an order to protect a party or person from annoyance,
embarrassment, oppression, or undue burden or expense[.]”); Kosek v. Ethicon, Inc., 2020 WL
6203310, *2 (N.D. Ill. Oct. 22, 2020) (“[T]here is room in the Rule 26 analysis for consideration
of the fact that MDL depositions have already occurred and, thus, the burden of re-doing the
depositions may be ‘undue’ and outweigh the usefulness of the information.”).
The Court now turns to the specific depositions that Kaiser seeks to consider whether they
meet the standards set forth in Rule 26(b).
With respect to the 30(b)(6) deposition, Kaiser seeks testimony regarding the following
topics:
1. The price of Brand Vytorin, including how and when Merck set or
changed the list price, wholesale acquisition cost, average sale price,
or any other published price of Brand Vytorin, as well as how and
when Merck set or changed any discounts, rebates, chargebacks, or
other adjustments to the price of Brand Vytorin.
2. Projections or analyses of the actual or expected impact of the entry
of Generic Zetia on Brand Vytorin, including with respect to sales,
profits, prices, or market share (including any analysis of erosion rates
or substitution rates).
3. The use of Brand Zetia in combination with other drugs as part of
a dyslipidemia treatment regimen.
4. Market research into or analysis of the factors considered by
prescribers in determining whether to prescribe Brand Vytorin over
alternative dyslipidemia and/or cardiovascular treatment regimens.
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5. The ability of payers to encourage covered members to utilize
pharmaceutical drug regimens containing the separate component
ingredients of a Fixed Dose Combination product in place of a Fixed
Dose Combination product.
6. The clinical considerations involved in utilizing a regimen
containing the separate component ingredients of Brand Vytorin in
place of Brand Vytorin.
7. Analysis and consideration of any strategies intended to address the
impact of Generic Zetia on sales of Brand Vytorin, including the
impact of any such strategy on Merck’s revenues or profits.
8. Marketing of Brand Vytorin to patients and prescribers.
9. Merck’s listing of the ’966 Patent in the Orange Book for Zetia and
Vytorin, including any evaluation of the propriety of such listings and
any bases for Merck’s decision to do so.
10. Merck’s listing of the ’106 Patent in the Orange Book for Zetia
and Vytorin, including any evaluation of the propriety of such listings
and any bases for Merck’s decision to do so.
ECF No. 122 at 4-5.
Topics 1 through 8 clearly relate to Vytorin and are relevant to Kaiser’s claims regarding
that drug. These topics either expressly reference Vytorin or pharmaceutical products that may be
relevant to Kaiser’s claims. Merck does not dispute Kaiser’s representation that the prior Merck
30(b)(6) depositions during In re Zetia occurred in 2019, well before Kaiser’s action was
transferred to the consolidated pre-trial proceedings. Merck contends that testimony on Topic 3
should be barred as the MDL discovery exhaustively explored the use of Zetia in combination
with other drugs for dyslipidemia treatment. However, because the 30(b)(6) depositions occurred
before Kaiser entered the case, it is not reasonable to determine, absent a stronger record, that the
issues noticed in Topic 3 and specifically relevant to Kaiser’s claims were already fully explored
in the prior depositions. Merck has not demonstrated that a corporate deposition on these topics
will be duplicative or cumulative of the MDL discovery.
Topics 9 and 10 involve Merck’s listing of the ’966 and ’106 Patent in the Orange Book.
Kaiser alleges that Merck’s listings were a part of its monopolistic scheme, but the patents
identified here are not the patents that are the focus of Kaiser’s allegations. In addition, Judge
Gilliam recently ruled that Kaiser’s Walker Process fraud claim may not proceed based on alleged
intentional misrepresentations and omissions regarding the prior art, but it may proceed based on
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allegations that the identities of the inventors were misrepresented. It is not clear to what extent
Topics 9 and 10 are relevant to the surviving Walker Process fraud claim. Therefore, Kaiser’s
request for a Rule 30(b)(6) deposition on these two topics is DENIED without prejudice to
Kaiser’s submitting a renewed request depending on the outcome of another pending discovery
dispute, ECF No. 109, that concerns a similar request for production of documents. If, for
example, the Court orders that Merck must respond to the similar document request disputed in
ECF No. 109, Kaiser may have a stronger basis to seek a 30(b)(6) deposition on these two topics.
Next, the Court considers Kaiser’s request to depose two former Merck employees as fact
witnesses. Glen Firestone is a document custodian proposed by Merck for Kaiser’s Vytorin-
related document requests, and Merck has not disputed Plaintiff’s representation that he was a key
decisionmaker as to Vytorin-related issues. Merck’s principal concern is that Firestone is a former
employee who left the company approximately eight years ago, he would be questioned about
events that occurred more than a decade earlier, and his involvement in Merck’s cardiovascular
franchise was time limited. On balance, these concerns suggest that the utility of Firestone’s
testimony may be limited, but they do not merit barring Kaiser from taking any testimony from
him.
With respect to McCrorey, Merck has also proposed him as a custodian for Vytorin-related
documents. Merck has not disputed in any meaningful way that McCrorey may have information
relating to sales, forecasting, planning, and budgeting for Vytorin. Merck’s objections are
grounded on the fact that McCrorey was previously deposed in the MDL and he departed from the
company fourteen years prior. There is no indication that the MDL was an opportunity to conduct
exhaustive discovery regarding Vytorin-related claims, as opposed to Zetia-related claims.
McCrorey may be deposed again, this time by Kaiser in connection with the Vytorin claims.
Because Kaiser’s Vytorin claims are substantially different from the Zetia claims that were the
subject to discovery in the MDL, Merck has not shown that a second deposition of McCrorey
would be unreasonably cumulative or duplicative. See Fed. R. Civ. P. 26(b). Merck’s other
concerns raise questions regarding the utility of McCrorey’s deposition at this point in time, but
those are risks that Kaiser will bear in using its time and resources to pursue to the deposition, and
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it is entitled to an opportunity to collect evidence that may be relevant to its case. Kaiser’s request
to depose two fact witnesses does not appear disproportionate to the needs of the case.
Finally, the Court considers Merck’s argument that the depositions of these two fact
witnesses should be held in abeyance until the 30(b)(6) deposition is completed, as the 30(b)(6)
deposition may obviate the need for the two fact depositions. The Court is not persuaded. The
testimony of individuals is distinct from the testimony of an entity, and these types of depositions
serve different purposes. See Louisiana Pacific Corp. v. Money Market 1 Institutional Inv.
Dealer, 285 F.R.D. 481, 487 (N.D. Cal. 2012). Though the fact witnesses’ testimony will not be
binding on Merck, it is an opportunity to test the corporate testimony against witness testimony
based on first-hand knowledge. Moreover, although Merck’s argument would be more persuasive
if Kaiser was pursuing numerous 30(b)(1) depositions, Kaiser’s request to depose two fact
witnesses without first completing the 30(b)(6) deposition is reasonable. Under these
circumstances, the depositions that Kaiser seeks do not create an undue burden on Merck.1
III. CONCLUSION
For the foregoing reasons, Kaiser’s requests for three depositions is GRANTED IN PART and
DENIED IN PART as set forth above.
IT IS SO ORDERED.
Dated: March 2, 2026
LISA J. CISNEROS
United States Magistrate Judge
1 This order does not resolve any objections that Firestone and McCrorey may raise as individual,
non-party witnesses.
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