United Wisconsin Services, Inc. v. Mylan Laboratories, Inc.

205 F.R.D. 363, 2001 U.S. Dist. LEXIS 23384
CourtDistrict Court, District of Columbia
DecidedSeptember 4, 2001
DocketNos. MDL 1290(TFH), 99ms276(TFH)
StatusPublished
Cited by5 cases

This text of 205 F.R.D. 363 (United Wisconsin Services, Inc. v. Mylan Laboratories, Inc.) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Wisconsin Services, Inc. v. Mylan Laboratories, Inc., 205 F.R.D. 363, 2001 U.S. Dist. LEXIS 23384 (D.D.C. 2001).

Opinion

MEMORANDUM OPINION

THOMAS F. HOGAN, Chief Judge.

Pending before the Court is a motion by Individually Represented Companies (“IRCs”) seeking leave of the Court or, in the alternative, intervention to pursue the following limited discovery in the form of a document request: “All documents in Class Counsels’ possession relating to their analysis and/or assessment of indirect purchaser damages, to specifically include any expert damages analysis and/or assessment.” IRC Mot. at 2; IRC Mem. at 3. Class Counsel has thus far refused to provide such discovery and now opposes the IRCs’ motion. Upon careful consideration of the motion, the opposition and reply thereto, and the entire record herein, the Court will deny the motion.

I. BACKGROUND

The IRCs are indirect purehasers/third party payors, like the plaintiffs, who claim antitrust injury from the defendants’ anti-competitive behavior. The plaintiffs, class representatives in this lawsuit, filed this action in May 1999. In July 2000, the plaintiffs and defendants announced a settlement of this suit conditioned upon final documentation and Court approval. In February 2001, this Court preliminarily approved the settlement and conditionally certified the class.

The IRCs have been aware of this lawsuit since at least September 1999 and have had communications concerning the settlement with the IRCs and Class Counsel since the July 2000 settlement announcement. Beginning around October 2000, the IRCs requested from Class Counsel their detailed expert damage analysis. The IRCs then repeated their request unsuccessfully for nine months. The IRCs made their final request by letter to Class Counsel on July 18, 2001, which resulted in an express refusal by Class Counsel to turn over the requested documents unless and until the IRCs did not opt out of the settlement by August 31, 2001.

Feeling as though they were in the “untenable position of making a decision ... whether to opt-out of the settlements without the benefit of information concerning the adequacy of the settlements fund,” the IRCs filed the instant motion for leave of Court to propound their document request or, in the alternative, to intervene under Federal Rule of Civil Procedure 24 to do the same.

II. DISCUSSION

A. Leave of Court

The IRCs first seek leave of the Court to propound their document request. In support thereof, the IRCs argue that courts permit class members to engage in limited discovery, citing Girsh v. Jepson, 521 F.2d 153, 157 (3d Cir.1975), and In re General Motors Corporation Engine Interchange Litigation, 594 F.2d 1106, 1123 (7th Cir. 1979). They also point toward their fiduciary duty as agents on behalf of their self-funded customers to make a reasonable and principled decision about whether or not to opt out of the settlement. Finally, the IRCs raise the specter that Class Counsel is acting in their own interests, contrary to the interests of the class, which “may well constitute a conflict of interest that disqualifies Class Counsel from adequately representing” the class. IRC Mem. at 11.

The plaintiffs, in opposition, contend that the IRCs, like all other class members, have three choices at this juncture: participate in the class by not opting out, participate in the class and file objections to the terms of the settlement to be heard at the fairness hearing in November 2001, or opt out and preserve their rights separately to prosecute their claims. Until the plaintiffs have made their decision to stay in the class by not opting out or until they have properly intervened, they argue, the IRCs are not entitled discovery. See In re Potash Antitrust Litig., 162 F.R.D. 559, 560-62 (D.Minn.1995). Moreover, the plaintiffs contend, the settlement amounts are public information and the IRCs ought to be able to calculate their own purchases of the drugs in the relevant jurisdictions and the increased payments made for them, the total third party payor pur[366]*366chases of the drugs, and their share of the net settlement proceeds. In the plaintiffs’ view, therefore, the discovery request is unnecessary.

The Court agrees with the plaintiffs and will deny leave to pursue the document request at this time. The cases relied upon by the IRCs are inapposite in this context. In Girsh, the Third Circuit reversed the district court’s final approval of a class action settlement and remanded for clarification of the record. 521 F.2d at 154-55, 159-60. The Girsh court deemed the record to be inadequate, specifically finding, inter alia, that the “objector ... was not afforded an adequate opportunity to test by discovery the strengths and weaknesses of the proposed settlement.” Id. at 157. That is, “[a]s an objector, Frackman was in an adversary relationship with both plaintiffs and defendants and was entitled to at least a reasonable opportunity to discovery against both.” Id. The Seventh Circuit similarly reversed the district court’s final approval of a subclass settlement in General Motors, in pertinent part finding that “the conduct of the negotiations [for the settlement] was relevant to the fairness of the settlement and that the trial court’s refusal to permit discovery or examination of the negotiations constituted an abuse of discretion.” 594 F.2d at 1124. Both cases, therefore, were decided in the context of appeal from final approval of the settlements. They involved actual class members — individuals that had not opted out — who had objected to the fairness of settlement and had been denied relevant and important discovery.

This case in its current posture, by contrast, presents only the issue of opt out for purported class members. At this juncture, the Court has not yet determined the fairness of the settlement for final approval purposes. It will not do so until November. The IRCs are thus positioned very differently than the individuals at issue in Girsh and General Motors. Though they claim to be “inclined” to stay in the class, the opt-out date has not yet passed. The IRCs, therefore, have not committed to remaining in the class, let alone made objections to the settlement. In this regard, this case is more akin to Potash, 162 F.R.D. at 560-61. There, an interregional cooperative sought “to be permitted to appear so as to assist its constituent members in making an informed decision on whether to opt in, opt out, or otherwise participate in this class action” and sought discovery accordingly. Id. at 560-61. The court denied the cooperative’s appearance under Rule 23(c)(2), holding that the Rule permits a party to appear only “after it has decided not to opt-out of the class”:

Otherwise, counsel for the class, as well as counsel for the Defendant, could be overwhelmed with discovery and information requests by innumerable potential class members whose ultimate allegiance may not be disclosed until an election is made to participate within the class or to be excluded.... [T]o permit [the cooperative] to inspect those documents that class counsel have culled, from the wealth of materials that the Defendants have produced to date, could contravene the interests of the class as a whole, particularly if [the cooperative] should ultimately decide to opt-out of the class.

Id.

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205 F.R.D. 363, 2001 U.S. Dist. LEXIS 23384, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-wisconsin-services-inc-v-mylan-laboratories-inc-dcd-2001.