Free Response in Opposition to Motion - District Court of California - California

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Edward Patrick Swan, Jr., State Bar No. 089429 Caryn M. Anderson, State Bar No. 247038 LUCE, FORWARD, HAMILTON & SCRIPPS LLP 600 West Broadway, Suite 2600 San Diego, California 92101-3372 Telephone No.: 619.236.1414 Fax No.: 619.232.8311 Attorneys for Third Party Scantibodies Laboratory Inc.

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

ABBOTT LABORATORIES, Plaintiff, v. SCANTIBODIES LABORATORY, INC., Defendant.

Case No. 08-CV-1525 H (BLM) The Hon. Barbara L. Major THIRD PARTY SCANTIBODIES LABORATORY, INC.'S OPPOSITION TO MOTION TO COMPEL Date: Time: September 17, 2008 3:00 p.m.

Third Party Scantibodies Laboratory Inc. ("SLI") respectfully submits this opposition to the motion to compel two subpoenas filed by Abbott Laboratories ("Abbott"). INTRODUCTION The two subpoenas arise out of a patent action pending in the Northern District of Illinois in Chicago between Abbott and Church & Dwight Co., Inc. ("C&D"). SLI is not a party to the Chicago action, but as Abbott has known for years, manufactures pregnancy test kits for C&D. This is not Abbott's first attempt to subpoena a large number of documents from SLI. In a prior action between Abbott and C&D filed in the District of New Jersey in 2005, Abbott issued a similarly overbroad document subpoena to SLI. See Exhibit 1 to the declaration of Edward Patrick Swan, Jr. ("Swan Decl."). On November 30, 2006, SLI timely served objections to the subpoena. Swan Decl., Exhibit 2. Abbott made no attempt to compel the production of these subpoenaed documents, and no documents were produced. 1
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Now, in a newly filed case in Chicago, Abbott has again subpoenaed documents from SLI, this time increasing the categories of documents from 7 to 18. Swan Decl., Ex. 3. SLI served timely objections to the subpoena. Swan Decl., Ex. 4. Counsel for Abbott and SLI then engaged in meet and confers that limited Abbott's subpoena to Request No. 11 calling for the production of certain test records. Swan Decl., ¶¶ 6-13, 25. Thereafter, Abbott's counsel reneged on the agreement, and demanded that SLI produce documents to all 18 categories. Swan Decl., ¶¶ 14-16. SLI refused. Abbott also served a subpoena to inspect SLI's facilities. Swan Decl., Ex. 7. On August 18, 2008, SLI served timely objections by mail. Swan Decl., ¶ 19, Ex. 14. Without seeing the objections, much less meeting and conferring on these objections, Abbott filed the instant motion to compel the next day. Swan Decl., ¶¶ 19-22. Abbott's motion to compel should be denied on several grounds. Among other things, Abbott failed to meet and confer concerning all disputed issues as required by Local Civil Rule 26.1(a). Further the subpoenas are overbroad and burdensome, and seek the production of documents already produced by C&D in the Chicago case. See Declaration of Stephen B. Shear ("Shear Decl."). It seeks documents that Abbott agreed not to pursue until it reneged. It also seeks virtually unlimited inspection of SLI's facilities. The motion to compel should be denied. POINTS AND AUTHORITIES The Motion to Compel Should be Denied Because Abbott Failed to Meet and Confer on All Disputed Issues Abbott failed to meet and confer "concerning all disputed issues" as required by Local Civil Rule 26.1(a). SLI timely served its objections to the inspection subpoena by mail on August 18, 2008. The next day, before it had even seen the objections, and without any attempt to meet and confer, Abbott filed the instant motion to compel. Swan Decl., ¶¶ 19-22. Based on this failure alone, Abbott's motion to compel is defective and should be denied. Local Civil Rule 26.1(a) provides that the Court "shall entertain no motion pursuant to Rules 26 through 37 ... unless counsel have previously met and conferred concerning all disputed issues." (emphasis added.) Abbott brings this motion to compel pursuant to Rules 26 and 45. (See Abbott's Brief, 7:2-7.) Therefore, this Court should not entertain the motion unless counsel have met and 2
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conferred concerning all disputed issues. Additionally, any such motion must be accompanied by a certificate of compliance with this rule. Local Civil Rule 26.1(b). Although Abbott purportedly attached a certificate of compliance, the certificate is misleading. (Abbott's Brief, 1:17-24.) For instance, the certificate represents that Abbott corresponded with SLI by phone and in writing regarding "the disputed issues." But, counsel never corresponded in any way, and counsel made no attempts to meet and confer, regarding the subpoena seeking an inspection of SLI's premises. Swan Decl., ¶¶ 19-22. Rather, counsel met and conferred regarding only the subpoena requesting the production of documents and testimony. Consequently, counsel have not met and conferred concerning all disputed issues raised by this motion as required by Local Civil Rule 26.1 and this Court should, therefore, not entertain this motion. Alternatively, the Court should not entertain the motion as to the subpoena seeking an inspection of SLI's premises as counsel did not meet and confer as to the disputed issues related to it. II. This Motion to Compel Should not be Granted Because the Subpoenas Exceed the Bounds of Fair Discovery and Impose an Undue Burden on SKL Rule 45 provides that, among other things, a nonparty may be compelled by subpoena to produce designated documents or to permit the inspection of premises. Rule 45(a)(1)(A)(iii). Rule 26, however, imposes limits on discovery that apply to Rule 45 subpoenas. See Concord Boat Corp. v. Brunswick Corp., 169 F.R.D. 44, 49 (S.D.N.Y. 1996); Schaaf v. SmithKline Beecham Corp., 233 F.R.D. 451, 453 (E.D.N.C. 2005). For instance, a court must limit discovery, even of relevant matter, if it determines that: (i) 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; (ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or (iii) the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues. Rule 26(b)(2)(C). Additionally, under Rule 26(c), a court may limit discovery to "to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense." /// 3
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Similarly, under Rule 45, a court must quash a subpoena that "subjects a person to undue burden" or "requires disclosure of privileged or other protected matter." Rule 45(c)(3)(A)(iii)-(iv). Finally, under Rule 45, a court may modify or quash a subpoena that requires "disclosing a trade secret or other confidential research, development, or commercial information." Rule 45(c)(3)(B)(i). Whether a subpoena imposes an undue burden "is a specific inquiry that turns on the facts of each case." Beinin v. Center for Study of Popular Culture, 2007 WL 832962, *5 (N.D. Cal. 2007); Williams v. City of Dallas, 178 F.R.D. 103, 109 (N.D. Tex. 1998). An "evaluation of undue burden requires the court to weigh the burden to the subpoenaed party against the value of the information to the serving party." Moon v. SCP Pool Corp., 232 F.R.D. 633, 637 (C.D. Cal. 2005). Therefore, the relevance of the subpoenaed information is important to whether a subpoena imposes an undue burden. Compaq Computer Corp. v. Packard Bell Electronics, Inc., 163 F.R.D. 329, 335 (N.D. Cal. 1995). Further, a witness' status as a non-party entitles him or her to "consideration regarding expense and inconvenience." Concord Boat, 169 F.R.D. at 49; see Schaaf, 233 F.R.D. at 453. In fact, the "status of the person as a nonparty is a factor that weighs against disclosure." Beinin at *5. Specifically, whether a documents subpoena imposes an undue burden "depends upon such factors as relevance, the need of the party for the documents, the breadth of the document request, the time period covered by it, the particularity with which the documents are described and the burden imposed." Concord Boat, 169 F.R.D. at 49; Schaaf, 233 F.R.D. at 453 [on motion to compel]. A subpoena that is facially overbroad imposes an undue burden. Williams, 178 F.R.D. at 109 ; In re Biovail Corporation Securities, 247 F.R.D. 72, 75 (S.D.N.Y. 2007). Requests for documents that pertain to a party and that can be more easily and inexpensively be obtained from that party also impose an undue burden. Moon, 232 F.R.D. at 638. Further, if the documents sought are neither relevant nor calculated to lead to the discovery of admissible evidence, "then any burden whatsoever imposed upon the non-party would be by definition undue." Compaq Computer Corp., 163 F.R.D. at 335-36. Because entry upon a party's premises "may entail greater burdens and risks than mere production of documents, a greater inquiry into the necessity for inspection" is warranted. Belcher v. Bassett Furniture Ind., Inc., 588 F.2d 904, 908 (4th Cir. 1978) [Rule 34 subpoena]. Therefore, under 4
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Rule 26, "the degree to which the proposed inspection will aid in the search for truth must be balanced against the burdens and dangers created by the inspection." Id.; Arkansas Game & Fish Comm. v. United States, 74 Fed.Cl. 426, 432 (2006). Where the same information can be gained from other methods of discovery, those methods should first be engaged before resorting to an inspection of a nonparty's premises. See Belcher, 588 F.2d at 909-10. Additionally, where the information sought by a Rule 45 nonparty subpoena to inspect premises is of "questionable relevance and not likely to lead to the discovery or relevant evidence," a protective order under Rule 26 is appropriate. Fellner v. Supreme Corp., 1995 WL 79787, *3 (D.N.J. 1995). A. The Subpoena for Documents and Testimony is Objectionable on Numerous Grounds

The subpoena for documents and testimony is objectionable on numerous grounds. For instance, the 18 categories seek a broad range of documents that SLI believes is largely in the possession of C&D and that were produced by C&D in the Chicago action. See Shear Decl. Abbott is required to seek the documents first from C&D, and only pursue them from SLI, a non-party, if it has exhausted all attempts to secure them from C&D. Abbott has either obtained the documents already from C&D, or has failed to do that first. Therefore, the information sought by this subpoena is either duplicative or available from another source that is more convenient and less burdensome under Rule 26(b)(2)(i). Further, this subpoena imposes an undue burden on SKL under Moon because the documents can more easily and inexpensively be obtained from a party. Moon, 232 F.R.D. at 638. The subpoena requests are overbroad, unduly burdensome, vague and ambiguous. Abbott has refused to limit any of the requests. Swan Decl., ¶ 16. Further, the subpoena requests are unlimited in scope and/or time, or pertain to a period of time that is not relevant to the underlying action. Despite SKL's requests to narrow the time period from 1999 to the present to a more reasonable period of the last two years, Abbott refused. Swan Decl., ¶ 16. Where, as here, a subpoena is facially overbroad, it imposes an undue burden. Williams, 178 F.R.D. at 109. Additionally, the subpoena seeks the production of documents containing confidential or proprietary business information of SLI. While there is apparently a protective order in place in the Chicago case, Abbott has not made any assurances that any documents produced would be protected. 5
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Where a subpoena requires disclosure of trade secrets or other confidential commercial information, it is appropriate for a court to protect anyone affected by the subpoena by modifying or quashing it. Rule 45(c)(3)(B)(i). Finally, the subpoena also seeks documents that are protected by the attorney-client or work product protection. These documents are clearly not discoverable. In fact, as explained above, a court must modify or quash a subpoena calling for the production of privileged documents. Rule 45(c)(3)(A)(iii). For these reasons, this subpoena imposes an undue burden on SLI and exceeds the bounds of fair discovery permitted under Rule 26(b)(2)(C) and Rule 45(c)(3). Therefore, Abbott's motion to compel the subpoena for documents and testimony should be denied. B. The Inspection Subpoena is Also Objectionable on Numerous Grounds

The inspection subpoena (Swan Decl., Ex. 7) is also objectionable on numerous grounds. For instance, the subpoena seeks to permit Abbott to enter SLI's "plant, facilities or other premises" for the "purpose of inspecting, photographing and videotaping premises, objects, product, equipment and operations that concern the production, manufacture and/or assembly of any test for the diagnosis of pregnancy or ovulation for or on behalf of Church & Dwight, Inc., or any component part thereof (C&D Test Kits)." It further seeks to conduct such inspection, photographing and/or videotaping for an unlimited period of time, and states that the inspection "shall be during an actual production run or runs of commercial batches of C&D Test Kits for the detection of pregnancy and ovulation." It further provides that the inspection "may be conducted by counsel for Abbott, a videographer, photographer and one or more experts," none of whom are identified by name. Swan Decl., Ex. 7; Declaration of Jerry Sun ("Sun Decl."), ¶ 2. Therefore, the subpoena is overly broad, unduly burdensome, not reasonably calculated to the discovery of admissible evidence and not relevant to any claim or defense on the grounds that the asserted claims of the patents-in-suit are not directed to a method of manufacture. Instead, the asserted claims are device claims and method of use claims. Where, as here, the subpoena seeks information of questionable relevance and is unlikely to lead to the discovery of relevant evidence, a protective order under Rule 26 is appropriate. Fellner, 1995 WL 79787, *3. Further, any burden 6
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imposed on a nonparty in the pursuit of non-relevant evidence is by definition undue. See Compaq Computer Corp., 163 F.R.D. at 335-36. Yet here, Abbott seeks to impose a substantial burden and risk on SLI by entering upon its private property and having persons of undisclosed identity videotape and photograph its operations. Further, SLI is informed and believes that C&D has already produced documents, including SLI's documents, detailing the ingredients, components, and materials of the devices manufactured by SLI for C&D as well as documents detailing the function, operation and method of use of the devices manufactured by SLI for C&D. Therefore, the subpoena is also harassing in that it seeks information that is cumulative and duplicative of information contained in the documents produced by C&D and already in Abbott's possession. Further the subpoena is harassing in that it seeks information that is cumulative and duplicative of Abbott's 30(b)(6) deposition of C&D and duplicative of information requested by Abbott's prior subpoena to SLI. Accordingly, this discovery ought to be limited under Rule 26(b)(2)(C). Further, Abbott ought to be required to use the information available, and that it already has, under other methods of discovery before resorting to an inspection of SLI's facility. Belcher, 588 F.2d at 909-910. Additionally, the subpoena seeks "inspection, photographing and/or videotaping" of SLI's "plant, facilities or other premises" where SLI manufactures product. Such "inspection,

photographing and/or videotaping" would unreasonably, improperly and impermissibly reveal and copy SLI's trade secrets and other confidential research, development and commercial information, and thereby require disclosure of privileged or other protected matter. Many manufacturing processes are unique to SLI and observation by a third party, especially a third party competitor could produce a competitive disadvantage. Sun Decl., ¶ 3. This should not be permitted under Rule 45(c)(3)(B)(i) as discussed above. The scope of the subpoena, both as to the unlimited time of the inspection and the areas to be inspected, is overly broad, unduly burdensome and oppressive. The inspection sought by the subpoena will unreasonably interfere and obstruct SLI's manufacturing and other operations. The inspection sought by the subpoena would allow unauthorized persons into SLI's manufacturing facility, presenting safety and liability issues. The production areas are clean and semi-clean rooms 7
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and as such require specific preparation, clothing and other supplies that are unique and specific to SLI. These areas are designed for those who are familiar with production and may be unsafe for visitors. The chemicals and other production supplies require specific degrees of safety training before entry is allowed. Sun Decl., ¶ 4. The inspection sought by the subpoena also seeks inspection by unnamed persons. Yet, as discussed above, the information sought is, at best, of questionable relevance. Simply put, the burdens and risks involved with Abbott's entry into SLI's facilities outweigh the degree to which the proposed inspection could possibly aid in the search for truth. Belcher, 588 F.2d at 908. For these reasons, the motion to compel the inspection of SLI's facilities should be denied. III. SLI Ought to be Protected Against Significant Expense If the Court grants any part of Abbott's motion to compel, "the order must protect a person who is neither a party nor a party's officer," such as SLI, "from significant expense resulting from compliance" and must ensure that SLI "will be reasonably compensated." Rule 45(c)(2)(B)(ii); Rule 45(c)(3)(C). Consequently, Abbott may, and should, be ordered to pay all or part of the expenses SLI reasonably incurs in complying with these subpoenas. See In re First American Corp., 184 F.R.D. 234, 241 (S.D.N.Y. 1998). The factors relevant to determining how much of the production expense Abbott ought to be ordered to pay include: (1) the scope of the discovery; (2) the invasiveness of the request; (3) the extent to which SLI must separate responsive information from privileged or irrelevant material; (4) the reasonableness of the costs of production; (5) whether SLI has an interest in the outcome of the case; (6) the relative resources of Abbott and SLI; and (7) whether this litigation is of public importance. U.S. v. Columbia Broadcasting System, Inc., 666 F.2d 364, 372, n.9 (9th Cir. 1982); In re First American Corp., 184 F.R.D. at 241. Here, the scope of the documents Abbott seeks is expansive, not reasonably limited by time, and its request is extraordinarily invasive, seeking to intrude on SLI's property to videotape and photograph manufacturing processes. Further, SLI must separate responsive documents from volumes of irrelevant and potentially protected commercial information belonging to unrelated customers. Moreover, SLI is a small, family owned and operated business. In contrast, Abbott is a multibillion 8
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dollar international conglomerate with substantial financial resources. Clearly, Abbott's resources available to bear the production expense are far greater than SLI's. Finally, SLI has no interest in the outcome of this litigation, nor does the public. Consequently, compliance is only beneficial to Abbott's interests. Therefore, considering these factors, Abbott ought to be ordered to pay all reasonable costs incurred in by SLI in complying with these subpoenas. CONCLUSION Based on the foregoing, SLI respectfully requests that Abbott's motion to compel be denied. If any portion is granted, SLI respectfully requests that Abbott be ordered to pay all reasonable costs incurred in by SLI in complying with these subpoenas. DATED: September 8, 2008 LUCE, FORWARD, HAMILTON & SCRIPPS LLP

By: /s/ Edward Patrick Swan, Jr. Edward Patrick Swan, Jr. Attorneys for Third Party Scantibodies Laboratory Inc.

101116322.2

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CERTIFICATE OF SERVICE Abbott Laboratories v. Scantibodies Laboratory, Inc. U.S. District Court, Southern District of California Case No. 08-CV-1525 H (BLM) I, declare as follows: I am an attorney with the law firm of Luce, Forward, Hamilton & Scripps
LLP,

whose

address is 600 West Broadway, Suite 2600, San Diego, California 92101-3372. I am over the age of eighteen years, and am not a party to this action. On September 8, 2008, I served the following: THIRD PARTY SCANTIBODIES LABORATORY, INC.'S OPPOSITION TO MOTION TO COMPEL DECLARATION OF EDWARD PATRICK SWAN, JR. IN SUPPORT OF THIRD PARTY SCANTIBODIES LABORATORY, INC.'S OPPOSITION TO MOTION TO COMPEL DECLARATION OF JERRY SUN IN SUPPORT OF THIRD PARTY SCANTIBODIES LABORATORY, INC.'S OPPOSITION TO MOTION TO COMPEL THIRD PARTY SCANTIBODIES LABORATORY, INC.'S NOTICE OF AND MOTION TO FILE DECLARATION OF STEPHEN B. SHEAR UNDER SEAL IN SUPPORT OF ITS OPPOSITION TO MOTION TO COMPEL on the interested parties in this action by: XX ELECTRONIC SERVICE: I hereby certify that I electronically filed the foregoing with the clerk of the court by using the CM/ECF system, which will send a notice of electronic filing to the following:

Stephen R Smerek [email protected] DECLARATION OF STEPHEN B. SHEAR [TO BE FILED UNDER SEAL]** ** ** OVERNIGHT MAIL: I sent a copy via overnight mail. EMAIL: I sent a copy via email transmission to the email addresses. I am readily familiar with this office's practice for transmissions by email. Transmissions are sent as soon as possible and are repeated, if necessary, until they are reported as complete and without error. In sending the foregoing documents by email, I followed this office's ordinary business practices. The sending email address is [email protected].

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Manual Notice List
The following is the list of attorneys who are not on the list to receive e-mail notices for this case (who therefore require manual noticing). You may wish to use your mouse to select and copy this list into your word processing program in order to create notices or labels for these recipients.
George C Lombardi Winston & Strawn LLP 35 West Wacker Drive Chicago, IL 60601 Raymond C. Perkins Winston & Strawn LLP 35 West Wacker Drive Chicago, IL 60601 Kevin E. Warner Winston & Strawn LLP 35 West Wacker Drive Chicago, IL 60601

I declare that I am employed in the office at whose direction the service was made. Executed at San Diego, California on September 8, 2008.

/s/ Edward Patrick Swan, Jr.

101116830.1