July 8, 2019 / 5:42 PM / 14 days ago

Pharma defendants invoke SCOTUS in bid to keep prescription data secret

(Reuters) - Faced with a ruling from the 6th U.S. Court of Appeals that could publicly expose crucial data about where prescription opioids were sold, pharmaceutical defendants in the nationwide opioids litigation are counting on a decision last month by the U.S. Supreme Court to keep the information under seal.

In a July 3 brief to U.S. District Judge Dan Polster of Cleveland, pharmaceutical manufacturers, wholesalers, distributors and retailers argued that the Supreme Court’s June 24 opinion in a Freedom of Information Act case, Food Marketing Institute v. Argus Leader Media, requires that prescription data they supplied to the U.S. government must remain confidential, despite the 6th Circuit ruling to the contrary. At the very least, the drug companies argued, Judge Polster must keep the data under seal until they and the Drug Enforcement Administration decide whether to ask the 6th Circuit to reconsider its opinion.

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The 6th Circuit’s June 20 decision, is a stirring endorsement of the right of public access to court materials. Early in the opioids litigation – in which more than 1,300 cities, towns and counties allege pharma defendants triggered an epidemic of drug abuse by falsely marketing prescription drugs – plaintiffs lawyers subpoenaed the DEA for records from its ARCOS database, which tracks controlled substances from manufacture all the way through distribution to retail pharmacies, hospitals, and doctors’ offices.

Both the DEA and the pharma defendants, who deny the plaintiffs’ allegations, opposed production: The DEA said it was worried about compromising criminal investigations; pharma companies claimed they’d suffer competitive harm from revelations about market share.

In the trial court, Judge Polster eventually found that the data would help MDL plaintiffs “discover how and where the virus grew.” That interest, he said, outweighed speculative concerns of the DEA and the defendants. But the MDL judge also said that only parties in the case could see the ARCOS data. Briefs and pleadings that mentioned the data were to be filed under seal; plaintiffs lawyers were barred from even discussing it with reporters; and cities and counties were instructed to inform the DEA and defendants if they received requests for the data under public records laws. When the Washington Post and the Charleston Gazette-Mail tried to get hold of ARCOS data from MDL plaintiffs, Judge Polster turned down their request, holding that the DEA and the defendants had shown good cause why the data should be shielded under a protective order.

The 6th Circuit said they had not. Judges Eric Clay and Richard Griffin, with a partial dissent by Judge Ralph Guy, said that the public had an abiding interest in the roots of the drug abuse epidemic, and that the ARCOS data would inform that understanding. The court pointed out that the Gazette-Mail, a West Virginia newspaper, previously obtained ARCOS data on prescriptions in its state. Its reporting on small-town pharmacies that filled millions of opioid prescriptions won a Pulitzer Prize and sparked Congressional investigations, the 6th Circuit said – and did not have a demonstrable effect on either the DEA’s law enforcement efforts or the pharma defendants’ commercial interests. (Reuters reported last month in an exclusive investigation that by sealing records in litigation over opioids, judges have contributed to the grim toll of the epidemic of drug abuse.)

“Defendants’ interests are far outweighed by the specific, concrete interest intervenors and the public have in disclosure of the ARCOS data,” the appeals court held. It vacated Judge Polster’s protective order and sent the case back to him with instructions to craft a narrow new order.

Judge Polster, in turn, issued an order calling for short briefs from the media, the DEA, MDL plaintiffs and MDL defendants on a new protective order. Lawyers for the MDL plaintiffs and the newspapers argued for broadly unsealing information in the case record. The DEA contended that Judge Polster should not revise the seal on ARCOS data until the Justice Department has decided whether to seek a rehearing before the 6th Circuit or Supreme Court review.

The pharma defendants took a more pugnacious stance, asserting that just days after the 6th Circuit called for disclosure of the ARCOS data, the Supreme Court, in its Argus Leader decision, rejected the analysis the 6th Circuit relied upon. In the Argus Leader case, the justices held that data submitted to the U.S. government from grocery retailers that accept SNAP food stamps is confidential, as the word was understood when FOIA became law, so it’s shielded from FOIA demands under the exemption for trade secrets and confidential commercial information. The Supreme Court said the FOIA exemption doesn’t demand a showing that a business will suffer “substantial competitive harm” from the disclosure of its confidential information, specifically repudiating a test that many federal circuits – including the 6th Circuit in the opioids case – have applied in cases involving the disclosure of commercial information.

The pharma defendants said it’s clear under the Argus Leader case that the ARCOS data is confidential and “therefore exempt from public disclosure, whether or not the disclosure would (cause) any competitive harm to the companies that supply the data to the government.” The pharma brief acknowledged that Supreme Court case involved FOIA’s exemption for trade secrets and commercial information and the opioids case concerns a protective order. But the defendants said that since the federal rules of civil procedure governing the disclosure of discovery materials employ the same language as the FOIA exemption, the same analysis applies.

“Government officials must protect the information from disclosure, and there is no occasion for the court to engage in any balancing of interests in disclosure,” the pharma brief said.

Response briefs are due later this month, but Judge Polster signaled skepticism in an order issued Friday. The judge agreed to hold off on a new ARCOS protective order until the DEA and the defendants have had time to decide whether to ask for additional review. But at the moment, Polster doesn’t seem to buy the defendants’ contention that the Supreme Court’s analysis of the FOIA exemption for trade secrets and confidential commercial information can be engrafted onto consideration of a protective order for materials produced in discovery.

The judge said that only bona fide trade secrets – and not all “business confidential” information – can be redacted from court filings going forward, rejecting defendants’ assertion that the Supreme Court’s Argus Leader case requires courts to construe protective orders more broadly.

“At best, (Argus Leader) may give defendants distant reason to ask the 6th Circuit to reconsider its conclusion regarding ARCOS data (which plaintiffs obtained from a federal agency by subpoena, not FOIA request),” Judge Polster wrote. “But (Argus Leader) does not call into question the long-applicable standard for redaction of other allegedly confidential information that is made a part of this court’s record.”

It seems clear that the opioid defendants are going to push for answers – before Judge Polster or the 6th Circuit – about how the Supreme Court’s business-friendly FOIA interpretation will impact protective orders shielding evidence produced in litigation. If you believe, as the 6th Circuit said in its opinion last month dissolving the ARCOS shield, that litigation records ought to be public absent a substantial and specific reason to keep them under seal, you’ll want to keep an eye on these developments.

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