Drug company asks state court to halt Chicago's release of document sought in reporter’s FOIA request

By Bethany Krajelis | Oct 23, 2014

CHICAGO (Legal Newsline) - One of the drug companies being sued by the City of Chicago over allegations of deceptive marketing followed a federal judge’s advice this week and went to state court to try to stop the city from releasing documents to a USA Today reporter who filed Freedom of Information Act requests.

Teva Pharmaceutical Industries Ltd. and its subsidiary, Cephalon Inc., filed a complaint for injunctive relief Wednesday in the Cook County Circuit Court, alleging an anticipatory breach of the confidentiality agreement Teva signed before complying with the city’s investigative subpoena.

In June, the city sued Teva and Cephalon, as well as Purdue Pharma LP, Purdue Pharma Inc., The Purdue Frederick Company Inc., Johnson & Johnson, Janssen Pharmaceuticals Inc., Endo Health Solutions Inc. and Actavis PLC over claims they deceptively marketed their opioid painkillers.

The suit was filed in state court, but removed to Chicago’s federal court, where just earlier this month a judge denied two of defendant drug companies’ request for a protective order stemming from the same documents at issue in the recently-filed circuit court complaint.

U.S. District Judge Elaine E. Bucklo, in an Oct. 10 opinion, suggested that Cephalon take its issue over the FOIA requests to state court under a breach of contract claim, a dispute “completely collateral” to the federal litigation she is presiding over.

Bucklo explained federal rules didn’t allow her to enter a protective order because USA Today wasn’t seeking discovery materials, adding that the drug companies, “[i]n their eagerness to litigate disputed questions of state law,” were “attempting to stretch Rule 26c,” the federal rule governing protective orders “beyond its plain language.”

In their complaint filed this week in state court, Teva and Cephalon point to the confidentiality agreement to urge a judge to block the city’s release of a 198-page internal marketing plan for Fentora, a drug Cephalon makes and sells.

USA Today reporter Peter Eisler filed a FOIA request with the city in July, seeking documents referenced in its lawsuit against the drug companies. The city informed Teva on Oct. 15 that intends to fulfill Eisler’s request and give him the marketing plan.

Teva alleges it gave the city its marketing plan, as well as more than 127,000 other documents, in response to an investigative subpoena that sought confidential and trade secret information about Fentora and other drugs over a span of more than six years.

The subpoena was served on Teva by Cohen Milstein, a plaintiffs’ class action law firm the city had hired prior to the filing of its suit to investigate allegations the drug companies deceptively marketed their painkillers.

The firm — which is waiting for Bucklo to rule on pending defense requests, including one to toss the suit and another to disqualify it from representing the city–is also representing Santa Clara and Orange counties in similar litigation against the drug companies.

Cephalon’s marketing plan, Teva alleges, was one of a number of documents it had designated as confidential under the Confidentiality Agreement it entered into with the city before complying with its subpoena. Cephalon, as Teva’s subsidiary, is a third-party beneficiary of the agreement, the suit states.

In the complaint, Teva asserts it “would not have produced all of the documents that it did” had it not received the city’s commitment to confidentiality via their agreement.  It claims the agreement would have been “meaningless if any document Teva produced, including a confidential document, could be made available to anyone simply made a request under FOIA.”

Teva and Cephalon claim they “will suffer irreparable harm” if the city releases its marketing plan to the USA Today reporter, or any other third party, because it contains propriety information about how it markets and launches products, as well as internal budgets, pricing  info and other trade secrets.

While the city has said the FOIA requires it to release the document, Teva and Cephalon claim in their complaint that “[t]he City is not required by law to disclose the marketing plan. To the contrary, the Confidentiality Agreement and Illinois law require the City not to disclose it.”

They note that the Confidentiality Agreement specifically addresses the situation of a third party seeking documents produced under investigative subpoenas.

“While the parties acknowledged that the City could not abrogate its duty to comply with the law, the parties agreed that ….”[a]ny documentary material, answers to written interrogatories, or oral testimony provided under [the] subpoena … shall be exempt from disclosure under the Illinois Administrative Procedure Act,” Teva and Cephalon allege.

“Teva also made it clear that it considered any confidential information produced pursuant to the Subpoena to be exempt from disclosure under Illinois law, including IFOIA.”

Although their complaint made note of Bucklo’s recent ruling and her suggestion to bring a breach of contract claim in state court, Teva and Cephalon did not mention a portion of the judge’s ruling that some might read as skepticism over their chances.

“To the extent those agreements require the City to deny the USA Today reporter’s pending IFOIA requests–which seems doubtful given that ‘nothing in [the agreements] shall be read to conflict with the City of Chicago’s duty to comply with the Public Disclosure Laws’–Rule 26(c) is not the right enforcement mechanism,” Bucklo wrote in her Oct. 10 opinion.

Bucklo also noted in her ruling if the city wants some advice before handing over the document to the USA Today reporter, the state’s FOIA allows public bodies to ask Attorney General Lisa Madigan for an advisory opinion on how to comply with their disclosure.

Chicago attorneys Tinos Diamantatos and Cortney S. Closey of Morgan Lewis & Bockius LLP submitted Teva and Cephalon’s circuit court complaint.

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