United States Court of Appeals For the First Circuit
Nos. 22-1047, 22-1182
UNITED STATES, ex rel., ANTONI NARGOL and DAVID LANGTON; STATE OF ARKANSAS, STATE OF CALIFORNIA, CITY OF CHICAGO, STATE OF COLORADO, STATE OF CONNECTICUT, STATE OF DELAWARE, DISTRICT OF COLUMBIA, STATE OF FLORIDA, STATE OF GEORGIA, STATE OF HAWAII, STATE OF ILLINOIS, STATE OF INDIANA, STATE OF IOWA, STATE OF LOUISIANNA, STATE OF MARYLAND, STATE OF MICHIGAN, STATE OF MINNESOTA, STATE OF MONTANA, STATE OF NEVADA, STATE OF NEW JERSEY, STATE OF NEW MEXICO, STATE OF NEW YORK, STATE OF NORTH CAROLINA, STATE OF OKLAHOMA, STATE OF RHODE ISLAND, STATE OF TENNESSEE, STATE OF TEXAS, COMMONWEALTH OF VIRGINIA, STATE OF WISCONSIN, COMMONWEALTH OF MASSACHUSETTS, CITY OF NEW YORK, STATE OF NEW HAMPSHIRE, STATE OF MISSOURI, STATE OF WASHINGTON, ex rel., ANTONI NARGOL and DAVID LANGTON,
Plaintiffs, Appellants,
v.
DEPUY ORTHOPAEDICS, INC.; DEPUY, INC.; JOHNSON & JOHNSON, SERVICES, INC.,
Defendants, Appellees.
APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS
[Hon. M. Page Kelley, U.S. Magistrate Judge]
Before
Barron, Chief Judge, Lipez and Montecalvo, Circuit Judges.
Ross Eric Morrison, with whom Ross B. Brooks, Alastair Findeis, Brooks LLC, and Yankwitt LLP were on brief, for appellants. Adam R. Tarosky, with whom Mark D. Seltzer, Hannah R. Bornstein, Colin T. Missett, and Nixon Peabody LLP were on brief, for appellees.
May 18, 2023 MONTECALVO, Circuit Judge. Antoni Nargol and David
Langton (collectively, "Relators") brought this qui tam suit
against DePuy Orthopaedics, Inc., DePuy, Inc., and Johnson &
Johnson Services, Inc. (collectively, "DePuy") under the False
Claims Act ("FCA"), 31 U.S.C. § 3729, alleging a fraudulent scheme
involving hip replacement devices sold by DePuy. The district
court dismissed with prejudice Relators' case under Rule 41(b) of
the Federal Rules of Civil Procedure for repeatedly failing to
comply with applicable protective orders. Relators appeal the
dismissal, arguing that the district court misinterpreted the
protective orders and erred in finding that the operative complaint
included information subject to one of those protective orders.
For the reasons that follow, we affirm the decision of the district
court and find that the district court did not abuse its discretion
in dismissing the suit based on Relators' repeated violations of
protective orders.
I. Background
The underlying facts have been extensively discussed by
this court previously in United States ex rel. Nargol v. DePuy
Orthopaedics, Inc., 865 F.3d 29, 31-34 (1st Cir. 2017)
(hereinafter, "DePuy I"). Thus, here, we examine only the relevant
factual and procedural history as to the Rule 41(b) dismissal and
summarize the necessary background.
- 3 - A. The First Amended Complaint
Relators brought this qui tam suit against DePuy under
the FCA in May 2012. The complaint centered on DePuy's
metal-on-metal hip-replacement device, marketed under DePuy's
"Pinnacle" product line. DePuy I, 865 F.3d at 32. A first amended
complaint was filed under seal in November 2013 ("FAC"). In July
2014, the United States declined to intervene.
B. The MDL Matters
Prior to filing this action, Relators had been experts
for the plaintiffs in a multidistrict litigation case pending in
the Northern District of Ohio relating to "ASR" hip implants
created by DePuy (the "ASR MDL"). In re: DePuy Orthopaedics, Inc.
ASR Hip Implants Prods. Liab. Litig., No. 1:10-md-02197-DAK (N.D.
Ohio). Relators were also consulted by the plaintiffs in another
multidistrict litigation case pending in the Northern District of
Texas relating to Pinnacle hip implants (the "Pinnacle MDL"). In
re: DePuy Orthopaedics, Inc. Pinnacle Head Implant Prods. Liab.
Litig., No. 3:11-md-02244 (N.D. Tex.). Protective orders
regarding confidential DePuy product design information were
issued in both of the multidistrict litigation cases
(individually, the "ASR protective order" and the "Pinnacle
protective order"; collectively, the "Protective Orders").
Beginning around May 2012, plaintiffs' counsel in the
ASR MDL provided Relators with confidential DePuy documents, as
- 4 - Relators had signed the ASR protective order. On November 8, 2013,
Relators sent some of the data and drawings they had received in
an August 2013 production to their expert in this case, QA
Consulting, Inc. ("QA"). Included in those documents were DePuy
Pinnacle engineering drawings that were originally produced with
the designation "AttyEyesOnly" (the "Pinnacle Drawings").1
In 2013, while consulting in the Pinnacle MDL, Relators
sought the engineering drawings for the Pinnacle device. Relator
Langton ultimately received documents from plaintiffs' counsel
related to the Pinnacle MDL and signed the Pinnacle protective
order on the same day, November 15, 2013.2 On November 17, 2013,
Relators sent a spreadsheet to QA that included the dimensions and
tolerances for the Pinnacle liner and head.
Before filing the FAC, Relator Langton traveled to
Sweden and received a flash drive with additional documents on it
from counsel for plaintiffs in one of the MDLs. On December 18,
2013, QA wrote a report (the "QA Report") summarizing its analysis
and referencing Pinnacle design specifications; the design
At some point, the "AttyEyesOnly" label was removed from 1
the document; however, it is unclear when or by whom. Assuming Relators were not the ones to remove the label, Relators were still informed of the confidential nature of the Pinnacle Drawings soon thereafter. Relator Langton signed the Pinnacle protective order on this 2
day; however, Relator Nargol did not sign the Pinnacle protective order until May 5, 2014.
- 5 - specifications were the same as those stated in some of the
Pinnacle Drawings. Some of the analyses in the QA Report also
referenced documents Relators had received as expert witnesses in
the MDLs, particularly those documents relating to the ASR hip
implant.
On October 16, 2014, Relators filed a motion to intervene
in the ASR MDL and requested a modification of the ASR protective
order. Relators disclosed to the Ohio court that they had given
documents produced by DePuy in the ASR MDL to the government and
to QA in connection with this qui tam action. On January 5, 2015,
the Ohio court denied Relators' motions, holding that granting
intervention and modification of the ASR protective order would be
prejudicial to both parties in the ASR MDL. The Ohio court noted
that
[a]llowing . . . modification of the [ASR protective order] rewards the [Relators] for using confidential information they obtained in their roles as experts; information which would not have been available to them absent their special employment.
* * *
If the Court agreed with the [Relators'] request, these retained experts would be free to use the knowledge they obtain during this litigation for their own benefit. This result is unacceptable.
The Ohio court then prohibited documents produced in the ASR MDL
from being used in the qui tam litigation, finding that Relators
- 6 - had already used these documents in the filing of the FAC in
violation of the ASR protective order.
C. The Second Amended Complaint & DePuy I
Several months later, on March 18, 2015, the district
court here heard argument regarding Relators' motion to partially
unseal the FAC. In reviewing the order from the Ohio court, the
district court noted that it had to assume that the order there
was "valid" and, "therefore, assume that the [R]elators did, in
fact, make use of confidential documents[.]" For that reason, the
district court found that the FAC was "tainted[.]" The motion to
partially unseal was then denied, and the district court entered
an order stating that should Relators file an amended complaint,
it must
be accompanied by affidavits from [R]elators sworn to under the pains of perjury that certify that the second amended complaint does not violate any relevant court order, including the protective orders issued in the MDL proceedings in the Northern District of Ohio or the Northern District of Texas or the order issued by the court in Ohio on January 5, 2015.
On May 4, 2015, Relators filed the Second Amended
Complaint ("SAC") under seal with the necessary affidavits
attached, stating that the SAC does not violate any relevant
protective order. Although the district court ultimately allowed
the SAC, at a related hearing, the district court repeatedly stated
that should the SAC be found to violate the Protective Orders,
- 7 - then the court would draw an adverse inference against Relators.
On August 24, 2015, Relators requested that the SAC be unsealed,
which DePuy assented to. On February 2, 2016, the district court
granted the motion to unseal.
Also in early 2016, on DePuy's motion, the district court
dismissed the SAC, finding that Relators "failed to identify any
specific false claims" and "failed to identify even a single
representative false claim for payment" or cite sufficient factual
evidence regarding the possibility of fraud. Depuy I, 865 F.3d at
33. On April 11, 2016, the district court addressed Relators'
motion for reconsideration and, in addressing Relators' claims
regarding new evidence, observed that the Relators were not making
the critical differentiation between confidential documents and
the "facts that underlie those documents" and so were not
representing that they had drafted the SAC without impermissibly
relying on confidential documents. The district court emphasized
that "the [R]elators could have used basic investigative tactics
to obtain those underlying facts without violating" the Protective
Orders prior to filing the SAC.
Relators appealed, and this court affirmed the district
court's dismissal of all claims that were based on a design-defect
theory of fraud. DePuy I, 865 F.3d at 36-37. However, we vacated
the district court's dismissal as to allegations of a "fraudulent
scheme with 'reliable indicia that lead to a strong inference that
- 8 - claims were actually submitted' . . . for government reimbursement
from the United States and from the state of New York." Id. at 41
(quoting United States ex rel. Duxbury v. Ortho Biotech Prods.,
L.P., 579 F.3d 13, 29 (1st Cir. 2009)). The matter was remanded
for resolution of the surviving claims -- counts 1, 2, and 27.
Id. at 43. On October 27, 2017, Relators filed a corrected Second
Amended Complaint ("Corrected SAC"), which was identical to the
SAC, except it only included the surviving claims.
D. The Corrected SAC & Related Orders
The Corrected SAC, like the SAC, included a statistical
analysis calculating the alleged rates at which the Pinnacle
products were defective. That statistical analysis was derived
from the QA Report, which had relied on Pinnacle product
measurements, specifically the Pinnacle head and liner's nominal
diameter and associated tolerances. That analysis also formed the
basis of the surviving falsity allegations -- allegations that the
"Pinnacle . . . devices did not materially comport with the
specifications of the FDA approval." DePuy I, 865 F.3d at 43.
As discovery ensued, the district court entered a
stipulated protective order (the "qui tam protective order") in
this case. In December 2019, Relators moved for clarification of
that order and sought guidance from the district court regarding
what documents that they had received as experts in the MDL matters
could be used in this litigation; DePuy also moved to compel
- 9 - certain documents that Relators had provided to QA. In response
to Relators' clarification request, the district court emphasized
that Relators "are prohibited from using any of the information
they received in their capacities as experts in the MDL litigations
to prosecute the present case." In response to DePuy's motion to
compel, the district court also required Relators to provide DePuy
with "all materials they gave to QA in the present case, including
information they generated or received as experts in the MDL
litigation, and indicate when each piece of information was
provided to QA."
In December 2020, DePuy identified the Pinnacle Drawings
as previously produced in the Pinnacle MDL and being utilized by
Relators in the litigation at hand. DePuy claimed that the
Pinnacle Drawings contained trade secrets in the form of the
precise nominal design dimensions and associated tolerances of the
36mm Pinnacle metal liner and head to a particular decimal place.
DePuy alleged that the Pinnacle Drawings, which were subject to
the Protective Orders, were sent by Relators to QA to perform the
calculations in the QA Report. Relators subsequently requested
leave to amend the Corrected SAC to remove information related to
the Pinnacle Drawings. Relators also maintained that they were
unaware that the Pinnacle Drawings were confidential.
In February 2021, Relators identified two documents,
Exhibits D-433 and D-467, introduced into evidence years earlier
- 10 - in a Pinnacle MDL bellwether trial; DePuy later introduced those
same documents in another case in 2016. See Paoli, et al. v. DePuy
Orthopaedics, Inc., et al., No. 3:12-cv-4975-K (N.D. Tex.); Aoki
v. DePuy Orthopaedics, Inc., et al., No. 3:13-cv-1071-K (N.D.
Tex.). Exhibit D-467 contained the Pinnacle liner diameter and
tolerances as stated in the documents sent to QA and the head
diameter in inches to the fifth decimal place; this exhibit
remained public. However, Exhibit D-433 -- which contained the
Pinnacle head dimensions to the same decimal point as stated in
the information sent by Relators to QA -- along with other
documents in the Paoli trial, were later redacted to prevent public
disclosure. Based on Relators' identification of these exhibits,
Relators stated that they believed this information was public and
that their earlier motion to amend was moot.
On March 5, 2021, DePuy filed a motion to strike the
allegations related to manufacturing defect rates in the Corrected
SAC and to dismiss the Corrected SAC. DePuy argued that Relators
utilized confidential information they received as experts in the
MDL matters in drafting the Corrected SAC. Specifically, DePuy
noted that Relators had never identified the design
specifications, to the decimal place provided to QA, for the
Pinnacle head (the "Subject Information") in the public domain.3
3Although DePuy had previously claimed that the Pinnacle liner was subject to the Protective Orders, DePuy ultimately agreed
- 11 - As a result, DePuy argued that all portions of the Corrected SAC
that incorporated the Subject Information should be struck, which
would lead to dismissal based on the Corrected SAC lacking
sufficient particularity, or, alternatively, that the Corrected
SAC should be dismissed based on Relators' alleged repeated
violations of the Protective Orders or abuse of the discovery
process.
On July 6, 2021, the district court denied DePuy's
motion, stating that "DePuy has failed to establish that any
information in the [Corrected SAC] that previously may have been
restricted was not in the public domain at the time of the filing
of the [Corrected] SAC." The district court further found that
"DePuy thus has failed to demonstrate that Relators violated any
relevant court order in pleading allegations in the [Corrected]
SAC." DePuy filed a timely motion for reconsideration, arguing
that the district court applied the improper legal standard in
assessing DePuy's motion to strike and dismiss. DePuy further
argued that the burden of identifying the origin of information
contained in the Corrected SAC should have been placed on Relators
based on the district court's previous statements and orders.
On September 16, 2021, the district court ordered
Relators to submit a supplemental brief addressing "the sole issue
that the Pinnacle liner dimensions were public at the time of the filing of the SAC.
- 12 - of how they were able to determine the upper and lower tolerance
levels for the Pinnacle [h]ead to five decimal places." Relators
pointed to the Pinnacle liner drawings, which were public at the
time of the filing of the SAC and contained the nominal diameter
and tolerance of the Pinnacle liner. Relators claimed that, from
that information, they calculated the diametrical clearance from
the liner to find the Pinnacle head diameter. Relators then stated
that they repeatedly converted and rounded the number back and
forth between the metric system and the imperial system, resulting
in the value they ultimately provided to QA for the Pinnacle head
diameter. Relators also claimed that they knew the number of
decimal places to round the value to based on various DePuy
documents. On October 12, 2021, in an affidavit from Relator
Langton, Relators identified, for the first time, a 613-page
document available on an educational website that purported to
depict the Subject Information within several of its pages. This
document, however, was uploaded to that website in 2018, years
after the SAC was filed.
On November 10, 2021, the district court granted the
motion for reconsideration -- finding it had made a legal error in
its prior decision regarding the burden placed on DePuy, struck
allegations involving the Subject Information from the Corrected
SAC and dismissed the same under Rule 41(b), finding that
confidential information had been utilized within it. That
- 13 - decision was filed under seal. The district court noted that
"Relators have been warned by multiple courts that they are
required to comply with the protective and court orders that govern
their use of that confidential information" and that they "have
been chastised repeatedly for failing to comply with those orders."
The district court also found that Relators' explanation for how
they arrived at the Subject Information sent to QA was convoluted
and, ultimately, unbelievable; the district court instead accepted
DePuy's "simpler explanation" that Relators acquired the Subject
Information from the confidential Pinnacle Drawings, which would
have provided all the information Relators then supplied to QA.
As to the use of the Subject Information, the district
court found that "at best, [Relators'] actions are the result of
poor record-keeping and investigation into the source of their
allegations, while at worst, their actions could be said to
demonstrate an intentional and repeated disregard of court
orders." Lastly, the district court held that allowing Relators
to amend their complaint for a third time at this late hour "would
unfairly prejudice DePuy and reward [R]elators for their
accumulated missteps." In accordance with that opinion, the order
of dismissal entered on December 7, 2021.
The district court requested the parties confer and
propose redactions to its decision "so that an unredacted or
partially redacted version of the order may be placed on the public
- 14 - docket." DePuy provided proposed redactions to the decision to
the district court. However, Relators objected to DePuy's proposed
redactions, specifically as to the redaction of the Subject
Information, citing Rule 46 of the Federal Rules of Civil
Procedure. The district court viewed this opposition as an
"improper" motion for reconsideration, as it repeated the same
arguments presented in Relators' opposition to the motion to
dismiss. As a result, the district court accepted DePuy's proposed
redactions to its decision. The redacted decision was then placed
on the public docket.
Relators subsequently filed a motion for reconsideration
and to set aside, amend, or alter the district court's final
judgment. Relators proffered "new" evidence in support of their
motion and argued that the district court applied the wrong legal
standard. The district court found that the evidence Relators
pointed to was not "new . . . but rather evidence that -- with due
diligence -- [R]elators could have brought to the court's attention
any time during the eighteen months that the parties were engaged
in contesting whether the information at issue was public." Given
the district court had recently reconsidered its dismissal
decision when considering Relators' objections to the redaction of
such, it held that a further examination of those same arguments
was "unnecessary" at that juncture. Accordingly, Relators' motion
- 15 - for reconsideration and to alter or amend was denied on January
21, 2022.
With respect to the Corrected SAC, Relators now appeal: (1)
the granting of DePuy's motion for reconsideration and (2) the
Rule 41(b) dismissal of the Corrected SAC; (3) the granting of
DePuy's motions to seal and (4) to strike; and (5) the denial of
Relators' motion for reconsideration.4
II. Discussion
A. DePuy's Motion for Reconsideration
The granting of a motion for reconsideration is reviewed
for abuse of discretion. Biltcliffe v. CitiMortgage, Inc., 772
F.3d 925, 930 (1st Cir. 2014) (citing Int'l Strategies Grp., Ltd.
v. Greenberg Traurig, LLP, 482 F.3d 1, 6 (1st Cir. 2007)). Motions
for reconsideration are "granted sparingly, and only when 'the
original judgment evidenced a manifest error of law, if there is
newly discovered evidence, or in certain other narrow
situations.'" Id. (quoting Global Naps, Inc. v. Verizon New
England, Inc., 489 F.3d 13, 25 (1st Cir. 2007)).
Relators state that they "do not accept [the] notion"
that it was Relators' burden to show that the Subject Information
4 Although Relators state that they are appealing the denial of their motion for reconsideration, they have not presented any arguments in support of such. Therefore, any arguments related to the appeal of Relators' motion for reconsideration are waived. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990).
- 16 - was public when the SAC was filed. However, before this court,
they have not put forth any arguments to support that contention.
Relators give no reasoning as to why, after receiving multiple
warnings over the course of this decade-long litigation, the
district court should not do exactly as it promised and place the
burden on Relators to show that information contained in the SAC
was public at the time of its filing.
Instead of addressing the pertinent issue, Relators
argue, "[a]side from the district court's shifting of the burden
from Defendants to Relators, the district court's Dismissal Orders
failed to explain what evidence, if any, it had initially
overlooked . . . ." Relators fail to appreciate that the district
court need not identify newly discovered evidence if it has
identified an error of law. See IDS Prop. Cas. Ins. Co. v. Gov't
Emps. Ins. Co., 985 F.3d 41, 51 (1st Cir. 2021) ("Where the
district court believes with good reason that it based its initial
decision on an error of law, or if its ruling patently
misunderstood a party or misapprehended the question before it, we
will not disturb the court's discretion to allow a motion for
reconsideration." (cleaned up)). Here, where the district court
has identified an error of law in its earlier decision -- namely
that it applied an improper burden on the moving party -- we find
no abuse of discretion in the granting of a motion for
reconsideration.
- 17 - B. Rule 41(b) Dismissal
This court reviews dismissals under Rule 41(b) for abuse
of discretion. Malot v. Dorado Beach Cottages Assocs., 478 F.3d
40, 43 (1st Cir. 2007) (citing Angulo-Alvarez v. Aponte de la
Torre, 170 F.3d 246, 251 (1st Cir. 1999)). Within our review for
abuse of discretion, legal questions are reviewed de novo, factual
findings for clear error, and issues of judgment or legal
application are reviewed for abuse of discretion. See Victim Rts.
Law Ctr. v. Rosenfelt, 988 F.3d 556, 559 (1st Cir. 2021). The
interpretation of an order presents a question of law; however,
appellate deference is appropriate when a district court is
interpreting its own order. See Monarch Life Ins. Co. v. Ropes &
Gray, 65 F.3d 973, 983 (1st Cir. 1995).
"This standard of review is not appellant-friendly --
and a sanctioned litigant bears a weighty burden in attempting to
show that an abuse occurred." Vallejo v. Santini-Padilla, 607
F.3d 1, 8 (1st Cir. 2010) (quoting Young v. Gordon, 330 F.3d 76,
81 (1st Cir. 2003)). When a court has dismissed a case for failure
by a party to adhere to court orders, those parties "have 'not
received a sympathetic ear from us.'" Malot, 478 F.3d at 43
(quoting Damiani v. R.I. Hosp., 704 F.2d 12, 17 (1st Cir. 1983));
see McKeague v. One World Techs., Inc., 858 F.3d 703, 707 (1st
Cir. 2017) ("Even schoolchildren know that changing the rules
mid-course to benefit someone who flouted them creates subtle and
- 18 - even substantial risks of unfairness."). However, we "balance the
court's venerable authority over case management with the larger
concerns of justice, including the strong presumption in favor of
deciding cases on the merits." Id. (citing Torres-Vargas v.
Pereira, 431 F.3d 389, 392 (1st Cir. 2005); Batiz Chamorro v.
Puerto Rican Cars, Inc., 304 F.3d 1, 4 (1st Cir. 2002)).
i. Violations of the Protective Orders
We first address Relators' primary argument that they
never violated any of the Protective Orders in filing the SAC. To
support this argument, Relators contend that the Subject
Information was already public at the time of the filing of the
SAC and point to the public filing of Exhibits D-433 and D-467 in
the Paoli trial in 2014. As to any discrepancy between the
allegedly publicly available numbers and the numbers utilized in
the drafting of the SAC, Relators reassert their mathematical
processes involving repeated conversions and rounding of the
numbers involved; these processes make little mathematical sense.
Relators also argue that they knew of the Subject Information
independent of any MDL discovery through the use of a machine in
Relators' laboratory. With these contradictory explanations as a
background, Relators contend that the district court
misinterpreted the Protective Orders and the district court's own
prior orders regarding the same.
- 19 - As to the interpretation of the Protective Orders, "[a]
district court speaks to the parties and the court of appeals
primarily through its orders." Negrón-Almeda v. Santiago, 528
F.3d 15, 22 (1st Cir. 2008). "[W]hen a court's order is clear and
unambiguous, neither a party nor a reviewing court can disregard
its plain language 'simply as a matter of guesswork or in an effort
to suit interpretive convenience.'" Id. at 23 (quoting Alstom
Caribe, Inc. v. Geo. P. Reintjes Co., 484 F.3d 106, 115 (1st Cir.
2007)). However, when the wording is imprecise, this court "can
comb relevant parts of the record to discern the authoring court's
intention." Id. (internal citations omitted).
The language of the Protective Orders, the Ohio court's
January 5, 2015 order, and the prior orders of the Massachusetts
district court are clear -- Relators were not to use any of the
information they learned through their work as experts in the MDLs
in this litigation. As a starting point, Relators once again fail
to distinguish between confidential documents and the facts
underlying those documents. It is true that once any of the
information Relators learned as experts subsequently became public
knowledge, then Relators would have been free to use that
information in their qui tam suit. The district court made it
clear -- in requiring Relators to file affidavits with the
SAC -- that Relators were responsible from the get-go to have
publicly available sources backing their allegations. The
- 20 - district court also noted that Relators could use "basic
investigative tactics" prior to filing the SAC to identify public
sources of the information. However, the district court found
that Relators did not know that the Pinnacle liner dimensions were
public until January 2021, years after Relators signed the
affidavits stating that the SAC did not contain any confidential
information. Although DePuy now concedes that the Pinnacle liner
dimensions are public, that finding does not ameliorate the
troubling situation Relators have created. The district court did
not understand its own orders to allow Relators to file the SAC,
affirm in sworn affidavits the information contained therein was
not confidential, and then later go on a fishing expedition to
identify public sources for the information utilized in the SAC.
We see no error in the district court's conclusion, as the
alternative would be nonsensical and directly contrary to the
purpose of the Protective Orders.
As to the Pinnacle head dimensions, the district court
held that Relator Langton's explanation as to how he arrived at
the Subject Information sent to QA "lack[ed] credibility[.]"
Credibility findings are "obviously decisions vested firmly in the
sound discretion of the district court[.]" Applewood Landscape &
Nursery Co. v. Hollingsworth, 884 F.2d 1502, 1509 (1st Cir. 1989).
Relators have not pointed to an alternative public source for the
Subject Information. After a careful review of the record, it is
- 21 - evident that the district court had sufficient facts to adequately
support its finding that Relators utilized the Subject Information
in drafting the SAC in violation of the Protective Orders.
ii. Appropriateness of Dismissal
As the SAC, and in turn the Corrected SAC, violated the
Protective Orders, we now turn to the issue of whether dismissal
was the appropriate sanction, guided again by our abuse of
discretion standard. Rule 41(b) states, in relevant part, "[i]f
the plaintiff fails . . . to comply with . . . a court order, a
defendant may move to dismiss the action or any claim against it.
Unless the dismissal order states otherwise, a dismissal under
this subdivision (b) . . . operates as an adjudication on the
merits." The appropriateness of a sanction under Rule 41(b) is
dependent on the circumstances of the case at issue. Malot, 478
F.3d at 43-44.
"In order to operate effectively and administer justice
properly, courts must have the leeway 'to establish orderly
processes and manage their own affairs.'" Vázquez-Rijos v. Anhang,
654 F.3d 122, 127 (1st Cir. 2011) (quoting Young, 330 F.3d at 81).
"The authority to order sanctions in appropriate cases is a
necessary component of that capability." Young, 330 F.3d at 81.
Accordingly, the sanction of dismissal is important, and,
"[m]oreover, in the federal system the Civil Rules reinforce and
augment the inherent power of district courts to dismiss cases for
- 22 - disregard of judicial orders." Id. However, "dismissal with
prejudice is a harsh sanction, which should be employed only when
a plaintiff's misconduct has been extreme and only after the
district court has determined that none of the lesser sanctions
available to it would truly be appropriate." Malot, 478 F.3d at
44 (quoting Est. of Solís-Rivera v. United States, 993 F.2d 1, 2
(1st Cir. 1993)) (cleaned up).
We have outlined "a non-exclusive list of substantive
factors to consider when reviewing sanctions orders: 'the severity
of the violation, . . . the deliberateness vel non of the
misconduct, mitigating excuses, prejudice to the other side and to
the operations of the court, and the adequacy of lesser
sanctions.'" Id. (quoting Benítez-García v. González-Vega, 486
F.3d 1, 5 (1st Cir. 2006)). This court is "[m]indful that case
management is a fact-specific matter within the ken of the district
court[.]" Robson v. Hallenbeck, 81 F.3d 1, 2-3 (1st Cir. 1996).
"[T]he disregard of court orders qualifies as extreme
behavior, and we do not take such insolence lightly." Malot, 478
F.3d at 44. This is particularly true when a plaintiff displays
a pattern of "repeatedly flouting court orders." Id. (quoting
Benítez-García, 486 F.3d at 5). Below, the district court found
that Relators violated the Protective Orders not only by including
confidential information in the Corrected SAC, but "repeatedly
over the course of this nearly decade-long litigation, evidencing
- 23 - a pattern of disregarding orders from this and other courts." This
recurrent conduct of disregarding the orders of several courts
emphasizes the severity of Relators' behavior.
The district court also found that DePuy had been
prejudiced by Relators' actions. Beginning in 2015, Relators had
many opportunities to identify the sources of the information
contained in the SAC. Relators also certified to the district
court, through their affidavits, that the SAC did not contain
confidential information. Had Relators not acted in this manner,
DePuy could have potentially identified the Subject Information as
utilized in the SAC years earlier. Instead, DePuy had to
repeatedly file motions with the district court in an attempt to
gather this information from Relators -- expending an enormous
amount of time and energy.
When reviewing the adequacy of lesser sanctions, we look
to determine whether the district court gave an "explanation for
its conclusion that any lesser sanction would be inappropriate."
Malot, 478 F.3d at 45. However, the explanation need not be
explicit in the district court's decision. See Vázquez-Rijos, 654
F.3d at 130. "[T]he law is well established in this circuit that
where a noncompliant litigant has manifested a disregard for orders
of the court and been suitably forewarned of the consequences of
continued intransigence, a trial judge need not first exhaust
milder sanctions before resorting to dismissal." HMG Prop.
- 24 - Invest., Inc. v. Parque Indus. Rio Canas, Inc., 847 F.2d 908, 918
(1st Cir. 1988).
The district court found that "[r]epeated attempts by
this court and others to hold [R]elators to their obligations have
proven futile, making dismissal the most appropriate sanction,
particularly when the court cannot trust that the remaining
allegations of the [SAC] are untainted." This conclusion was
well-supported by the record. Further, Relators had been on alert
for years that the district court was concerned with the use of
confidential information. The district court clearly believed,
and reasonably so, that given the pattern of disregarding court
orders in the face of these warnings, a lesser sanction would have
had no deterrent effect on Relators. Therefore, the district court
need not resort to a lesser, and likely inadequate, sanction.
There is also a procedural dimension to our review,
"which addresses concerns such as notice, opportunity to be heard,
and the court's explanation for its choice of sanction." Malot,
478 F.3d at 44. Although prior notice is an "important
consideration[,]" such is "not a prerequisite to dismissal with
prejudice[.]" Id. at 45 (citing Robson, 81 F.3d at 3). The notice
consideration can weigh in favor of imposing dismissal where the
"disregard of a prior warning from the court exacerbates the
offense" and can weigh against imposing dismissal where "the lack
of warning sometimes mitigates it." Vallejo, 607 F.3d at 9
- 25 - (quoting Robson, 81 F.3d at 3). A plaintiff can also be put on
notice of the risk of dismissal by the filing of a motion to
dismiss. Id. at 10.
Relators had an opportunity to respond to DePuy's
initial motion to dismiss and to strike and took that opportunity.
Further, after receiving DePuy's motion for reconsideration, the
district court specifically requested additional information from
Relators to assist the court in addressing the pending motions.
The record clearly shows that Relators had notice of the possible
dismissal, as well as an opportunity to respond.
We accordingly find that the district court did not abuse
its discretion in finding that Relators had, once again, violated
the Protective Orders and in imposing the weighty sanction of
dismissal with prejudice.
C. Sealing Orders
Relators also challenge the district court's orders
sealing Exhibit D-433 and redacting its dismissal order. In
support of this contention, Relators reiterate many of their prior
arguments that the Subject Information was public and, as a result,
believe it was improper for the court to seal and redact these
documents in contravention with the right to public access.
"Courts have long recognized that public monitoring of
the judicial system fosters the important values of quality,
honesty and respect for our legal system." United States v.
- 26 - Kravetz, 706 F.3d 47, 52 (1st Cir. 2013) (quoting In re Providence
J., 293 F.3d 1, 9 (1st Cir. 2002)). Within the purview of common
law public access, when the district court, after reviewing the
facts of the case at hand, allows a motion to seal documents or a
portion thereof, this court's review is only for abuse of
discretion. See F.T.C. v. Standard Fin. Mgmt. Corp., 830 F.2d
404, 411 (1st Cir. 1987).
In determining whether the common law right of access
applies, the court must determine whether the documents are
"judicial records." Kravetz, 706 F.3d at 54. "Such records are
those 'materials on which a court relies in determining the
litigants' substantive rights.'" Id. (quoting In re Providence
J., 293 F.3d at 9-10). These materials are distinguishable from
documents that "'relate merely to the judge's role in management
of the trial' and therefore 'play no role in the adjudication
process.'" Id. (quoting In re Boston Herald, Inc., 321 F.3d 174,
189 (1st Cir. 2003)) (cleaned up). Put another way, the term
"judicial record" is meant to "distinguish documents presented to
a judge in connection with a discovery dispute from the record on
which a judge actually decides the central issues in a case." In
re Boston Herald, Inc., 321 F.3d at 189.
"[R]elevant documents which are submitted to, and
accepted by, a court of competent jurisdiction in the course of
adjudicatory proceedings, become documents to which the
- 27 - presumption of public access applies." Standard Fin. Mgmt. Corp.,
830 F.2d at 409. However, "we also have concluded that no right
of access attaches to civil discovery motions themselves or
materials filed with them." Kravetz, 706 F.3d at 55. Once the
court determines that the presumption of public access applies, it
must then "weigh the presumptively paramount right of the public
to know against the competing private interests at stake."
Standard Fin. Mgmt. Corp., 830 F.2d at 410 (citing In re Knoxville
News-Sentinel Co., 723 F.2d 470, 478 (6th Cir. 1983)).
Relators primarily argue here that the documents or
information therein that were sealed were already public, and,
therefore, any sealing thereof was unwarranted. However, even
accepting this contention, this court has never adopted a bright
line rule banning the protection of public documents. See Poliquin
v. Garden Way, Inc., 989 F.2d 527, 534 (1st Cir. 1993). Therefore,
we continue with our typical analysis as to the common law right
to public access.
As to Exhibit D-433, although this document may have
been filed as an exhibit in another case -- and was therefore
clearly a judicial record there -- that does not necessitate a
finding that Exhibit D-433 is a judicial record in this matter.
The district court did not examine Exhibit D-433 for its substance
in this litigation, but rather to determine whether there was a
violation of the Protective Orders.
- 28 - However, even assuming, without deciding, that both
documents are judicial records, "[t]he 'presumptive right of
access attaches to those materials which properly come before the
court . . . .'" Philibotte v. Nisource Corp. Servs. Co., 793 F.3d
159, 162 n.2 (1st Cir. 2015) (quoting In re Providence J., 293 at
9). Here, the crux of the district court's decision was that
Relators had improperly utilized the Subject Information in the
constructing and filing of the SAC in violation of the Protective
Orders; we have now affirmed that decision. Therefore, the Subject
Information, contained in both Exhibit D-433 and the dismissal
order, was never properly before the district court. Thus, it was
clearly within the district court's discretion to seal any
reference to the Subject Information because the presumptive right
of access did not apply.
D. Amendment of the Corrected SAC
Lastly, Relators take issue with the district court's
decision to not allow Relators to amend the Corrected SAC.
Relators argue that even if the confidential Subject Information
was incorporated into the Corrected SAC, the Corrected SAC could
still have survived without the use of the Subject Information.
Relators' argument misses the mark. As discussed above, the
Corrected SAC was not dismissed based on futility or lack of
particularity, but instead was dismissed as a sanction under Rule
41(b). Allowing Relators to amend their pleading for a third time
- 29 - at this late hour and under the circumstances at hand would be in
contravention of this court's affirmance of the district court's
holding that a lesser sanction would be inadequate.
III. Conclusion
A close reading of the factual and procedural history
here leads to but one conclusion: the district court did not abuse
its discretion in dismissing Relators' Corrected SAC under Rule
41(b). For the reasons detailed above, the orders of the district
court are affirmed.
- 30 -