In Re Neurontin Antitrust Litigation

Citations: 801 F. Supp. 2d 304; 2011 U.S. Dist. LEXIS 88547; 2011 WL 3502370Docket: MDL No. 1479. Master File No. 02-1390

Court: District Court, D. New Jersey; August 10, 2011; Federal District Court

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Class Plaintiffs filed a motion for discovery under the crime-fraud exception to attorney-client privilege against Pfizer, Inc. and Warner-Lambert Company LLC, aiming for in camera review of documents the Defendants deemed privileged. The case involves allegations that Pfizer engaged in anti-competitive practices to maintain monopoly power over gabapentin products, delaying the entry of generic alternatives into the market until late 2004, which led to higher prices for direct purchasers of Neurontin. The Court, led by District Judge Faith S. Hochberg, acknowledged the historical significance of attorney-client privilege in promoting open communication for sound legal advice. However, the crime-fraud exception exists to prevent the privilege from protecting communications made for fraudulent or criminal purposes. The process to invoke this exception involves presenting a factual basis that supports a good faith belief it applies, followed by an in camera evaluation by the court, which is subject to a more lenient standard of proof than that required for the exception itself.

In-camera review of documents requires the invoking party to establish a prima facie case demonstrating (1) the client's commission or intention to commit fraud or crime and (2) that attorney-client communications were aimed at furthering that fraud or crime. Class Plaintiffs request this review for documents concerning (1) the '479 Patent litigation related to Defendants' off-label marketing of Neurontin and (2) potential fraud or misrepresentation to judges during patent litigation.

Two possible bases for invoking the crime-fraud exception are identified: (1) the illegal off-label promotion of Neurontin and (2) fraud on the court regarding statements about this promotion. Pfizer admitted to illegal off-label marketing from 1995 to 1996, with evidence from a Massachusetts court indicating that such activities persisted until December 2004. Class Plaintiffs argue that the lawsuits filed to protect Pfizer’s interests in the '479 Patent were part of a scheme to maintain profits from Neurontin's off-label sales.

The criminal case against Warner-Lambert, which resulted in a guilty plea by Pfizer on June 7, 2004, charged the company with distributing an unapproved drug and misbranding. The allegations specified that Neurontin was promoted for numerous unapproved uses beyond its epilepsy indication. Additionally, Judge Patti B. Saris's findings from the In re Neurontin Marketing and Sales Practices Litigation confirmed that Pfizer engaged in fraudulent marketing practices, violating the Racketeer Influenced and Corrupt Organizations Act and California Unfair Competition Law, with jury findings indicating ongoing fraudulent activities as late as December 2004.

Pfizer was found to have engaged in fraudulent practices by suppressing negative clinical trial results and promoting positive findings, particularly regarding off-label uses of Neurontin. The court determined that Pfizer made material misrepresentations in advertising and communications, emphasizing the lack of scientifically accepted evidence supporting Neurontin's efficacy for conditions such as bipolar disorder and neuropathic pain. Despite acknowledging illegal conduct later, Warner-Lambert denied any off-label promotion during litigation involving patent infringement against generic companies. In correspondence to the court, Warner-Lambert asserted that it had never promoted Neurontin for non-epilepsy uses, even while submitting affidavits that implied off-label sales were justified by the drug's efficacy. The acknowledgment of off-label marketing only came after Pfizer's guilty plea in a related case. 

In regard to the '479 Patent Litigation, the plaintiffs seek in camera review of communications between Warner-Lambert and its counsel related to the patent litigation. They argue that Warner-Lambert filed this litigation to protect an illegally established market for off-label sales after generic competitors sought to market their own versions of Neurontin. To invoke the crime-fraud exception, it must be shown that the communications were intended to further an unlawful act, not just related to a crime. Legal advice must directly relate to illicit conduct, reflecting a clear intent to further that conduct.

Warner-Lambert triggered a 30-month stay on FDA approval for generic products by filing the '479 infringement actions, which perpetuated its illegal off-label marketing practices. The Court expresses concern over Pfizer's admitted illegal conduct related to off-label promotion, referencing a guilty plea in Massachusetts and judicial findings in a related case. Although the Court anticipates that issues of estoppel from past admissions will arise in future motions, it finds that the Class Plaintiffs have not sufficiently established a connection between the '479 Patent litigation and Pfizer's off-label marketing that would justify in camera review of related documents. The Plaintiffs' argument, which posits that both actions were aimed at increasing profits beyond legal boundaries, lacks credible supporting evidence. The Court notes that mere allegations do not meet the necessary factual basis for such reviews. Additionally, the Class Plaintiffs seek in camera review of documents concerning Pfizer's off-label marketing and representations to the Court, alleging these were intended to conceal illegal activities. Pfizer's assertions to the Court regarding its non-involvement in off-label promotion contradict its earlier admissions, raising questions about potential misrepresentations. However, the Court has yet to find sufficient grounds to permit the requested review of documents related to these claims.

Pfizer's off-label promotion activities and its representations to the court establish a factual basis for a reasonable person to believe that a review of certain materials could provide evidence supporting the applicability of the crime-fraud exception to attorney-client privilege. On August 10, 2011, the court partially granted and partially denied the Plaintiffs' Motion for Discovery under this exception. The court ordered the Class Plaintiffs to conduct an in camera review of specific categories of documents related to: (1) off-label uses and marketing of Neurontin, (2) a July 1, 1999 letter to Judge Chesler in Warner-Lambert v. Purepac, (3) a December 27, 2000 hearing in the same case, (4) summary judgment papers regarding the '479 patent from that case, and (5) statements about off-label marketing made during a September 24, 2004 hearing before Judge Lifland. These documents are to be submitted to Special Master Rice as per his prescribed procedures. Additionally, Pfizer is alleged to have engaged in misconduct by improperly listing patents, manipulating the patent approval process, filing sham lawsuits, and promoting Neurontin for unapproved uses. The court assumes familiarity with prior opinions related to this litigation and acknowledges that further information is necessary for evaluating additional sets of documents related to the 479 Patent and off-label litigation.

Aggressive promotional activities by Pfizer regarding a drug, which drew government scrutiny in 1999 leading to a complaint, were halted. Class Plaintiffs currently do not meet the criteria for in camera review of the '479 Patent litigation documents but may renew their request if new information arises. There is a clear link between Pfizer’s wrongdoing and its court statements, particularly as Pfizer initially denied illegal conduct that continued until 2004, despite claiming it ceased around 1999 when the government investigation began. The Massachusetts court referenced Dr. Gary A. Mellick, a Pfizer consultant, who reported on Neurontin’s efficacy for non-epileptic conditions; Pfizer relied on his work in patent litigation through an affidavit from Dr. Elizabeth A. Garofalo. No claims indicate that the attorneys involved were aware of false representations, yet the crime-fraud exception to attorney-client privilege could apply even without attorney knowledge of criminal activities. This exception permits the denial of privilege for communications intended to further a crime or tort, based solely on the client's intent. Additionally, other documents submitted on May 21, 2010, will not undergo in camera review at this time.