Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 1 of 24 1 QUINN EMANUEL URQUHART & SULLIVAN, LLP 2 James R. Asperger (Bar No. 83188) 3 jimasperger@quinnemanuel.com 865 S. Figueroa St., 10th Floor 4 Los Angeles, California 90017 5 Telephone: (213) 443-3000 Facsimile: (213) 443-3100 6 Attorney for Express Scripts, Inc. 7 8 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION 9 10 11 IN RE SUBPOENAS DUCES TECUM AND TO TESTIFY AT DEPOSITION TO 12 OPTUMRX, INC. Case No. 8:17-MC-00025 13 14 ANTHEM, INC, Plaintiff and CounterDefendant, 15 16 17 18 19 20 21 22 Underlying Litigation: Civil Action No. 1:16-cv-02048-ER United States District Court Southern District of New York vs. EXPRESS SCRIPTS, INC., Defendant and CounterPlaintiff. [DISCOVERY MATTER] JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NON-PARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION 23 24 25 26 27 28 JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 2 of 24 TABLE OF CONTENTS 1 2 3 4 Page I. PRELIMINARY STATEMENTS..................................................................... 1 A. ESI’s Preliminary Statement................................................................... 1 6 B. Optum’s Preliminary Statement.............................................................. 4 7 II. THE PARTIES’ JOINT REQUEST FOR TRANSFER ................................... 7 8 III. ESI’S POSITION .............................................................................................. 7 9 A. Information Concerning the Optum Proposal is Highly Relevant to the Litigation....................................................................................... 9 B. Optum Has Not Articulated Any Undue Burden.................................. 12 C. Claims of Competitive Harm Do Not Justify Optum’s Refusal to Provide The Discovery Requested by ESI............................................ 13 5 10 11 12 13 14 IV. OPTUM’S POSITION .................................................................................... 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -i- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 3 of 24 1 Pursuant to Federal Rule of Civil Procedure 45 and Local Rules 45 and 37-2, 2 Express Scripts, Inc. (“ESI”), Defendant and Counter-Plaintiff in the civil action 3 Anthem, Inc. v. Express Scripts, Inc., currently pending before Judge Ramos in the U.S. 4 District Court for the Southern District of New York at civil action number 1:16-cv5 02048-ER (the “Litigation”), and non-party OptumRx, Inc. (“Optum”) submit this Joint 6 Stipulation Regarding ESI’s Motion to Compel Optum to Comply With Subpoena 7 Duces Tecum and to Testify at Deposition (respectively, the “Document Subpoena” and 8 “Deposition Subpoena,” together, the “Subpoenas”). 9 Optum refuses to produce any documents in response to the Document Subpoena 10 or to provide a corporate deponent on any topic that may relate to internal Optum 11 documents, analyses or deliberations, and the parties have been unable to resolve their 12 dispute despite extensive meet and confer efforts. Optum is located in Irvine, 13 California, and so compliance with the Document Subpoena and Deposition Subpoena 14 is required in this judicial district, and ESI is required to file its motion to compel here. 15 See Fed. R. Civ. P. 45(d)(2)(B)(i). 16 ESI and Optum consent to—and affirmatively request—transfer of this 17 matter to the Southern District of New York, pursuant to Federal Rule of Civil 18 Procedure 45(f). 19 I. PRELIMINARY STATEMENTS 20 A. 21 ESI seeks highly relevant documents and deposition testimony from third-party ESI’s Preliminary Statement 22 Optum concerning a pricing proposal (the “Optum Proposal”) provided by Optum to 23 Plaintiff Anthem, Inc. (“Anthem”), that Anthem is using to try and justify its claim for 24 $14.8 billion in pricing reductions from ESI, which acts as Anthem’s pharmacy benefit 25 manager (“PBM”).1 Anthem claims (erroneously) that it has a contractual right to 26 27 1 PBMs are independent business entities that serve as “intermediaries between pharmaceutical 28 manufacturers and pharmacies on the one hand” and “health benefit providers” and other third-party -1- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 4 of 24 1 receive “competitive benchmark pricing” from ESI, and that ESI’s current pricing 2 exceeds that benchmark by more than $14.8 billion. Having already commenced the 3 Litigation, Anthem—in a blatant effort to manufacture support for its spurious claim— 4 solicited a pricing proposal from Optum, which competes against ESI in the PBM 5 services market. Anthem has repeatedly stated in the Litigation that it intends to rely 6 upon the Optum Proposal to support Anthem’s allegations regarding “competitive 7 benchmark pricing.” Accordingly, ESI served the Subpoenas on Optum, seeking 8 documents and testimony concerning the Optum Proposal. 9 Optum was aware of the dispute between Anthem and ESI at the time it provided 10 the Optum Proposal, and knew full well that Anthem was seeking the Optum Proposal 11 in order to use it against ESI. Indeed, Optum went so far as to explicitly give Anthem 12 permission to use the Optum Proposal in the Litigation. Optum’s motives were clear. 13 Providing Anthem with the Optum Proposal would both harm a competitor (ESI) and 14 ingratiate Optum with a potential future client (Anthem). 15 Having knowingly and willingly provided Anthem with a pricing proposal that 16 was custom designed by Anthem for use in the Litigation, Optum is now refusing to 17 produce any documents whatsoever, and, separately, prevent ESI from obtaining 18 deposition testimony concerning Optum’s internal analysis, deliberations, development 19 and approach to the proposal it provided to Anthem. In support of its position, Optum 20 argues that the “marginal hypothetical relevance of such documents could not possibly 21 outweigh the burden, expense, and potential competitive harm to Optum[,]” and 22 “[t]estimony about such information would subject nonparty OptumRx to severe 23 competitive harm that far outweighs the benefits of such testimony.” See Optum 24 Objections and Responses to Document Subpoena at 5, 7, 8, 10, and 12, attached hereto 25 as Exhibit 1 to the Declaration of Loughran Potter (“Potter Declaration”); Optum 26 payors on the other. Pharm. Care Mgmt. Ass’n. v. Rowe, 429 F.3d 294, 298 (1st Cir. 2005). 27 Essentially, a PBM operates the prescription drug benefit provided by employers, insurers, 28 governmental entities, health plans, and other third-party payors and providers of health benefits. -2- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 5 of 24 1 Objections and Responses to Deposition Subpoena at 4-9, attached hereto as Exhibit 2 2 to the Potter Declaration. Optum’s arguments are meritless. 3 First, the documents and testimony sought by ESI are critically relevant to this 4 Litigation. Anthem itself has made that clear. Having made allegations in the 5 Litigation about what constitutes “competitive benchmark pricing,” Anthem solicited a 6 pricing proposal from Optum that was intended to support Anthem’s allegations; 7 specified the desired form and substance of the proposal including by sending detailed 8 “proposed” pricing terms; obtained Optum’s consent to use the pricing proposal in the 9 Litigation; and has now declared its intention to do just that. In light of these facts— 10 which Optum cannot dispute—the circumstances surrounding the Optum Proposal are 11 directly relevant to the Litigation. For example, in assessing whether or not the Optum 12 Proposal is truly reflective of “competitive benchmark pricing,” the fact-finder must 13 take into account, amongst other things: Optum’s motives in providing the proposal; 14 the assumptions—including any internal assumptions and analyses—that Optum relied 15 upon in making the proposal; whether Optum ever seriously intended to contract with 16 Anthem on the terms set forth in the proposal; and how Optum internally assessed 17 Anthem’s request for a purported proposal, and otherwise developed and assembled 18 that proposal. This is information that can be obtained only from Optum itself, and it 19 will necessarily concern Optum’s internal documents and testimony about its internal 20 process and deliberations. 21 Second, Optum’s “undue burden” objection fails because it has impermissibly 22 failed to quantify, describe or discuss the details of any alleged burden imposed by the 23 Subpoenas, presumably because there is very little burden (certainly, no undue burden) 24 surrounding ESI’s request for Optum to identify and produce a well-defined scope of 25 documents concerning a single proposal provided to Anthem. 26 Finally, Optum’s “competitive harm” argument should be rejected because 27 Optum willingly provided Anthem with the Optum Proposal knowing full well that 28 Anthem intended to use it against ESI in the Litigation. If Optum were genuinely -3- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 6 of 24 1 concerned about having to produce documents and testimony concerning the Optum 2 Proposal, it should not have made an affirmative decision to insert itself into the 3 Litigation. Having done so, Optum cannot now seek to withhold this information on 4 the basis of alleged competitive harm. And in any event, any genuine competitive harm 5 issues can be adequately addressed by designating produced documents and testimony 6 as “Highly Confidential” under the Protective Order in the Litigation, which limits 7 disclosure to ESI’s external counsel and experts. 8 ESI has a clear need for—and right to—Optum’s documents and testimony 9 concerning the Optum Proposal. ESI therefore seeks an order compelling Optum to 10 produce documents concerning, and a Rule 30(b)(6) witness prepared to testify on, the 11 genesis and purpose of the Optum Proposal; information provided, gathered, consulted, 12 relied on, or used in connection with the Optum Proposal; the underlying analysis 13 behind the Optum Proposal, including any profit and loss analyses; and drafts or earlier 14 versions of the Optum Proposal. 15 B. Optum’s Preliminary Statement 16 ESI already has access to all of the information it needs, both through Anthem 17 and the deposition testimony that OptumRx has agreed to provide. ESI cannot justify 18 its efforts to obtain nonparty OptumRx’s highly confidential commercial information, 19 both because that information is irrelevant to the case and, alternatively, because ESI’s 20 need does not outweigh the potential harm to OptumRx. Accordingly, the motion 21 should be denied. 22 ESI seeks discovery concerning whether OptumRx’s proposal to Anthem (the 23 “OptumRx Proposal” or “Proposal”) is reflective of “competitive benchmark pricing.” 24 By way of background, ESI provides PBM services to Anthem. A dispute arose in 25 2015, which ripened into the underlying Litigation. As is relevant here, Anthem claims 26 it is not receiving the competitive benchmark pricing to which it is allegedly entitled, 27 28 -4- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 7 of 24 1 which ESI denies. Assuming that Anthem prevails on the issue of entitlement, 2 the 2 next question is what constitutes competitive benchmark pricing. Anthem intends to 3 rely in part upon (i) a third-party analysis of market pricing, and (ii) two proposals 4 Anthem obtained from ESI’s competitors, OptumRx and CVS Caremark, which 5 Anthem contends are consistent with the third-party analysis. ESI claims the third6 party analysis is flawed, and the proposals by OptumRx and CVS are not reflective of 7 competitive benchmark pricing. 8 ESI seeks a broad range of documents and deposition testimony from OptumRx 9 that ESI contends is relevant to evaluating the Proposal. But ESI offers little in terms 10 of substantiating a need for the requested discovery from OptumRx. Documents that 11 were shared between Anthem and OptumRx should be (and have been) obtained from 12 Anthem, as reflected in ESI’s very submissions to this Court. Moreover, OptumRx has 13 already agreed to produce a 30(b)(6) witness to testify about those documents and the 14 terms of the OptumRx Proposal. 15 Accordingly, the real dispute here pertains to internal OptumRx documents and 16 testimony that would reveal the processes, procedures, and analysis used by OptumRx 17 to generate the OptumRx Proposal. This information is not discoverable because it is 18 highly confidential commercial information proprietary to OptumRx that is not relevant 19 to whether the OptumRx Proposal is consistent with competitive benchmark pricing. 20 ESI has the OptumRx Proposal. It knows what terms OptumRx was willing to offer to 21 Anthem. It has the information and assumptions that Anthem provided to OptumRx 22 used to formulate the Proposal (or can obtain that information from Anthem). It also 23 has the communications between OptumRx and Anthem relating to the Proposal (or can 24 obtain that information from Anthem). In addition, as the PBM for Anthem since 2009, 25 ESI has access to the Anthem data that would form the basis for any proposal. Finally, 26 27 2 OptumRx takes no position on the issues of contract interpretation that form the basis for the 28 Litigation. -5- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 8 of 24 1 as the largest PBM in the country, ESI has access to troves of information and data 2 about the marketplace for PBM services. In fact, it has agreed to produce its internal 3 market analyses in the Litigation. ESI does not need to know confidential information 4 that OptumRx generated internally in preparing the Proposal to evaluate whether the 5 proposal comports with the market for PBM services. 6 To justify its efforts to sift through OptumRx’s confidential commercial 7 information, ESI has concocted a conspiracy theory entirely devoid of merit. 8 According to ESI, OptumRx’s confidential commercial information is “highly relevant” 9 because, with OptumRx’s knowledge, Anthem allegedly solicited the OptumRx 10 Proposal solely for use in the Litigation. This is nothing more than a baseless and 11 unsupportable accusation. Neither the timing of the solicitation of the Proposal, the 12 time period covered by the Proposal, nor the amendment to the non-disclosure 13 agreement permitting Anthem to produce information about the Proposal even remotely 14 suggest the existence of an illicit agreement. They merely evidence normal business 15 operations in which Anthem was seeking to ensure that it could obtain substitute 16 services if its contract with ESI was terminated, and OptumRx was making efforts to 17 win that business. 18 ESI makes two other arguments that are easily refuted. First, it claims that 19 OptumRx’s “undue burden” objection fails because OptumRx has not quantified the 20 burden. However, when a party seeks irrelevant confidential information from a 21 nonparty, any production of such materials constitutes an undue burden. Finally, ESI 22 contends that OptumRx’s objection based upon competitive harm cannot be sustained 23 because OptumRx knew that Anthem would use the OptumRx Proposal in the 24 Litigation. As discussed briefly above and in further detail below, this theory is 25 meritless. By participating in confidential negotiations with Anthem, OptumRx did not 26 “insert” itself into the Litigation. It responded to a request for a proposal, and nothing 27 more. That OptumRx provided Anthem with permission to produce materials about 28 -6- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 9 of 24 1 that Proposal in the Litigation does not transfer the entire bid process into a sham 2 created for purposes of the Litigation. 3 II. THE PARTIES’ JOINT REQUEST FOR TRANSFER 4 Both OptumRx and ESI request that this Court transfer this matter to the 5 Southern District of New York. Under Rule 45(f), the Court “may transfer a motion 6 under this rule to the issuing court if the person subject to the subpoena consents . . . .” 7 Fed. R. Civ. P. 45(f). OptumRx is the party subject to the Subpoenas, and it consents to 8 the transfer of ESI’s motion. The Litigation was filed in the Southern District of New 9 York more than eighteen months ago. That Court, and the presiding judge—Judge 10 Edgardo Ramos—have significant knowledge of the issues and history of the 11 Litigation. While counsel for both ESI and OptumRx have offices in the Central 12 District of California, (and undersigned counsel at those offices) the principal attorneys 13 representing both ESI and OptumRx on matters related to this Litigation are in New 14 York or Washington, D.C. 15 III. ESI’S POSITION 16 Anthem is relying on the Optum Proposal to try and justify its claim for $14.8 17 billion in pricing reductions from ESI. Optum knew full well that Anthem wanted the 18 Optum Proposal for precisely this purpose, and agreed to permit Anthem to use it 19 against ESI—one of Optum’s primary competitors—in the Litigation. Having 20 knowingly permitted the Optum Proposal to become a central issue in the Litigation, 21 Optum now unreasonably refuses to provide any documents or meaningful deposition 22 testimony concerning said proposal. ESI therefore seeks an order compelling Optum to 23 produce documents and a Rule 30(b)(6) witness prepared to testify about key topics 24 including the genesis and purpose of the Optum Proposal; information and assumptions 25 provided, gathered, consulted, relied on, or used in connection with the Optum 26 Proposal; the underlying analysis behind the Optum Proposal, including any profit and 27 loss analyses; and drafts or earlier versions of the Optum Proposal. Specifically, ESI 28 -7- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 10 of 24 1 seeks an order compelling Optum to produce documents responsive to the following 2 two Requests in the Deposition Subpoena:3 1. All Documents and Communications concerning or relating to any talks, discussions, correspondence, or negotiations with Anthem since December 1, 2009 regarding the provision (or potential provision) of PBM Services to Anthem, including but not limited to: 3 4 5 a) 6 Documents and Communications concerning pricing; b) Documents and Communications concerning formulary design; 7 c) Documents and Communications concerning pharmacy networks; 8 9 d) or 10 Documents and Communications concerning benefit design; e) Documents and Communications concerning operational or administrative services to be provided by OptumRx. 11 12 2. All Documents and Communications concerning or relating to any formal or informal, draft or final, proposal, bid, offer or quote for the provision of PBM Services to Anthem prepared by OptumRx since December 1, 2009 (regardless of whether such proposal, bid, offer or quote was ever sent to Anthem), including but not limited to: 13 14 15 (a) Documents and Communications concerning any formal or informal request for such proposal, bid, offer or quote made by Anthem; 16 17 (b) Documents and Communications concerning the use or potential use of such proposal, bid, offer or quote by Anthem, including but not limited to its use in negotiations with ESI, or in the Anthem Suit; 18 19 (c) Studies, reports, work product, or other analyses created or performed by or on behalf of OptumRx in preparing or formulating such proposal, bid, offer or quote; 20 21 (d) Information provided by Anthem that was considered, consulted or relied upon by OptumRx in preparing or formulating such proposal, bid, offer or quote; 22 23 (e) Data, studies, reports, analyses, or other information considered, consulted or relied upon by OptumRx in preparing or formulating such proposal, bid, offer or quote; 24 25 26 3 Although ESI’s original Document Subpoena was reasonable and proportional to the needs of the 27 Litigation, ESI nonetheless agreed to further narrow the scope of its motion to compel to Requests 1 28 and 2, and to narrow the requested date range to January 2015 through March 2017. -8- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 11 of 24 (f) Studies, reports, work product or other analyses that compared PBM Services provided to Anthem by ESI with PBM Services to be provided by OptumRx as part of such proposal, bid, offer or quote; 1 2 3 (g) Documents and Communications concerning the October 2016 Offer;4 or 4 (h) Communications involving Brian Griffin, Deepti Jain, and/or Mark Thierer. 5 6 7 8 ESI further seeks an order compelling Optum to provide a 30(b)(6) witness on the following topic: The Optum Proposals; including but not limited to (i) their genesis; (ii) Optum’s understanding of the purpose and use of the Optum Proposals; (iii) communications with Anthem regarding the Optum Proposals; (iv) any information or assumptions provided, gathered, relied on, or used in connection with the Optum Proposals; (v) the reasons why Optum provided the Optum Proposals, including any perceived or actual benefits to Optum; (vi) the underlying analysis behind the Optum Proposals, including any analysis concerning Optum’s profit or loss associated with the Optum Proposals; and (vii) drafts or earlier versions of the Optum Proposals, specifically how those differed from the final proposals and whether Anthem requested any changes. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Optum opposes production on the basis that the information sought is entirely irrelevant to the Litigation; and that to the extent it has limited relevance, such relevance is outweighed by the burden and competitive harm that would be suffered by Optum. Optum further opposes making a corporate witness available to provide complete testimony about the Optum Proposal because Optum will not “disclose highly-confidential, proprietary, commercially sensitive, and/or trade secret information of OptumRx.” See Objections and Responses to Deposition Subpoena at 4-8. Each of these arguments is meritless, for the reasons that follow. A. 23 24 Information Concerning the Optum Proposal is Highly Relevant to the Litigation The “scope of discovery through a [Rule 45] subpoena is the same as that 25 applicable to Rule 34 and other discovery rules.” Fed. R. Civ. P. 45, Advisory 26 27 4 The Document Subpoena defines the October 2016 Offer as the proposal, bid, offer or quote for the 28 provision of PBM Services provided by OptumRx to Anthem in or around October 2016. -9- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 12 of 24 1 Committee Note (1970). Under Rules 34 and 30, which govern the production of 2 documents and depositions, respectively, the proper scope of discovery is as specified 3 in Rule 26(b). See Francis v. Bryant, CVF-045077-AWISMSP, 2006 WL 1627917, at 4 *2 (E.D. Cal. June 7, 2006) (quoting Heat & Control, Inc. v. Hester Indus., Inc., 785 5 F.2d 1017 (Fed. Cir. 1986) (“Rule 45[] must be read in light of Rule 26(b)”)); Exxon 6 Shipping Co. v. U.S. Dep’t of Interior, 34 F.3d 774, 779 (9th Cir. 1994) (applying Rule 7 26 and Rule 45 standards to rule on a motion to quash subpoena). Rule 26(b) permits 8 the discovery of any non-privileged matter “relevant to any party’s claim or defense 9 and proportional to the needs of the case,” and specifies that “[i]nformation within the 10 scope of discovery need not be admissible in evidence to be discoverable.” Relevance 11 is defined broadly for discovery purposes. U.S. v. McGraw-Hill Cos., Inc., CV 13-77912 DOC JCGX, 2014 WL 1647385, at *8 (C.D. Cal. Apr. 15, 2014) (Garneau v. City of 13 Seattle, 147 F.3d 802, 812 (9th Cir. 1998)). 14 There can be no dispute that the Optum Proposal itself is highly relevant to the 15 Litigation, because Anthem has affirmatively stated that it intends to rely upon the 16 Optum Proposal to substantiate its claim against ESI for $14.8 billion in pricing 17 reductions. Specifically, Anthem—which erroneously claims to be entitled to 18 “competitive benchmark pricing” under its contract with ESI—intends to argue that the 19 Optum Proposal reflects “competitive benchmark pricing” in the market for PBM 20 services, because it reflects a genuine, binding offer to provide Anthem with PBM 21 services for the prices reflected therein. 22 Given Anthem’s position, the circumstances surrounding the Optum Proposal are 23 highly relevant to the Litigation. This is especially true given the evidence suggesting 24 that the Optum Proposal was less a genuine pricing proposal and more an attempt by 25 Anthem to manufacture evidence to support its case. For example, Anthem actively 26 solicited the Optum Proposal from Optum nearly five months after the Litigation 27 began. See Email from J. Petronzi to J. Grosklags, Sept. 9, 2016, attached hereto as 28 Exhibit 3 to the Potter Declaration (showing first time Anthem sent proposal-related -10- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 13 of 24 1 information to Optum). Moreover, rather than asking Optum to provide it with a 2 competitive bid (which is the common practice in a competitive bidding process), 3 Anthem instead provided Optum with the specific pricing that Anthem wanted Optum 4 to include. See id. (“[a]ttached are the materials, including proposed terms/definitions 5 as well as a separate schedule documenting the detailed proposed pricing ...”). The 6 transparent nature of Anthem’s solicitation and Optum’s proposal are further supported 7 by the “coincidental” time period covered by the Optum Proposal. Although dated and 8 executed December 29, 2016, the Optum Proposal contains backward looking pricing 9 terms for 2016, that Anthem has now seized upon in the Litigation to fault ESI’s 10 pricing. Further still, the Optum Proposal provides pricing through only 2019, which, 11 conveniently, happens to be when the PBM agreement between Anthem and ESI comes 12 to an end. Finally, the Optum Proposal states, on its face, that it is non-binding, yet 13 Anthem has suggested otherwise in the Litigation. 14 In light of these facts, ESI is entitled to discovery (indeed, ESI very much needs 15 discovery) to uncover and unpack the precise contours of the Optum Proposal; how, if 16 at all, it relates to purported “competitive benchmark pricing”; and whether it 17 constitutes a genuine bid to contract on the terms reflected therein, or rather merely a 18 stalking-horse bid that was intended to be used against ESI in the Litigation. 19 Moreover, even if the Optum Proposal was a genuine bid (which ESI seriously 20 doubts), ESI would still be entitled to the discovery it seeks in order to determine 21 whether that bid provides a true “apples-to-apples” benchmark that can be meaningfully 22 compared to the pricing provided by ESI under its contract with Anthem. For example, 23 was the Optum Proposal based on realistic assumptions regarding the number of claims 24 that Anthem could provide, as well as the specific formularies and pharmacy networks 25 that Anthem would agree to? How was Optum generating the precise pricing terms it 26 was proposing? Was Optum assuming that it would need to provide all of the same 27 services currently provided by ESI? Was Optum factoring in the nearly $5 billion in 28 upfront money that ESI was required to pay Anthem as part of the deal for ESI’s PBM -11- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 14 of 24 1 services contract? Was Optum counting on any offsetting, ancillary agreements with 2 Anthem such that Optum could offer lower pricing terms as part of its proposal? What 3 were Optum’s long term projections about its proposal, especially since Optum’s 4 proposal was non-binding? The documents and testimony sought by ESI—which can 5 only be obtained from Optum itself—are directly relevant to these critical issues. 6 Optum’s partial concession to provide deposition testimony (yet still no 7 documents) on some of these topics, provided ESI does not inquire into any internal 8 information or analyses, is far from sufficient. ESI has to have the opportunity to 9 obtain complete discovery from Optum, in order to fully defend itself against Anthem 10 in the Litigation. 11 B. Optum Has Not Articulated Any Undue Burden 12 Consistent with Rule 45, ESI has taken reasonable steps to avoid imposing undue 13 burden or expense on Optum. See Fed. R. Civ. P. 45(d)(1). Specifically, ESI 14 repeatedly offered to reimburse Optum for reasonable compliance costs. And, as 15 referenced above, ESI offered to narrow the scope of the Document Subpoena to only 16 two of the six requests (Requests 1 and 2). In response, Optum has failed to provide 17 any details concerning its alleged burden, has made no suggestions as to what 18 additional concessions it believes are necessary, and has refused even to discuss 19 reimbursement. Optum’s burden objection should therefore be rejected. See Sullivan v. 20 Personalized Media Commun., LLC, 16-MC-80183-MEJ, 2016 WL 5109994, at *3 21 (N.D. Cal. Sept. 21, 2016) (denying non-party motion to quash subpoena and noting 22 “[c]onclusory or speculative statements of harm, inconvenience, or expense are plainly 23 insufficient[.]”) (internal quotation omitted); see also Probulk Carriers Ltd. v. Marvel 24 Int’l Mgmt. and Transp., 180 F. Supp. 3d 290 (S.D.N.Y. 2016) (refusing to quash Rule 25 45 subpoena in part because claims of undue burden were entirely conclusory). Even if 26 the Subpoenas did impose some burden upon Optum—which Optum has never 27 established—such burden would not be sufficient to sustain Optum’s objection given 28 the critical relevance of the information sought by ESI. See Amini Innovation Corp. v. -12- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 15 of 24 1 McFerran Home Furnishings, Inc., 300 F.R.D. 406, 409–10 (C.D. Cal. 2014) (noting 2 that burden must be weighed against the importance of the information sought by the 3 requesting party). C. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Claims of Competitive Harm Do Not Justify Optum’s Refusal to Provide The Discovery Requested by ESI As a threshold matter, Optum’s competitive harm argument should be rejected because Optum made a conscious decision to inject itself and its pricing into the Litigation. At the time Anthem solicited a bid from Optum, Optum knew full well that Anthem intended to use the bid in the Litigation. Indeed, Optum went so far as to execute a non-disclosure agreement with Anthem that explicitly permitted Anthem to produce the Optum Proposal in the Litigation pursuant to the existing Protective Order (thereby facilitating its use by Anthem). See First Amendment to Mutual NonDisclosure Agreement dated October 6, 2016, attached hereto as Exhibit 4 to the Potter Declaration, § 1 (stating that information related to the Optum Proposal “may be produced in the Litigation[] on a confidential basis”) (the “Revised NDA”).5 Having made the decision to provide pricing information to Anthem in a form that was designed to be used against ESI in the Litigation, Optum cannot now object to producing documents and testimony concerning the Optum Proposal—including internal Optum documents and analyses and testimony regarding internal Optum documents, analyses and deliberations—on the basis that it concerns commercially sensitive pricing information. That ship has sailed. Optum’s competitive harm claims should also be rejected because it has failed to specify what competitive harm it would suffer. ESI’s Subpoenas do not seek production of Optum’s general pricing, or indeed Optum’s pricing for any specific client. Rather, the Subpoenas are narrowly tailored to seek information concerning 5 Anthem has not yet produced an executed version of the Revised NDA, but an email produced by Anthem shows that the Revised NDA was executed on the morning of October 9, 2016. See Email 27 from M. Thierer to D. Jain, Oct. 9, 2016, attached hereto as Exhibit 5 to the Potter Declaration 28 (“Thank you for working with us to get the amended NDA executed this morning.”). -13- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 16 of 24 1 only the specific pricing that Optum offered to Anthem, the disclosure of which has 2 already been consented to by Optum. See Revised Non-Disclosure Agreement dated 3 October 6, 2016, § 1. Moreover, to the extent Optum has any genuine competitive 4 harm concerns, they can be adequately addressed by designating produced documents 5 and testimony as “Highly Confidential” under the Protective Order in the Litigation, 6 which limits disclosure to ESI’s external counsel and experts. 7 IV. OPTUM’S POSITION 8 ESI has not—and cannot—demonstrate a sufficient need for internal OptumRx 9 information about the OptumRx Proposal that OptumRx did not share with Anthem. 10 These documents are highly confidential, and their production to ESI would reveal 11 OptumRx’s internal processes, procedures, data and analysis for formulating proposals 12 to provide the very same services as ESI. Between the documents that ESI has 13 obtained (and can obtain) from Anthem, and the deposition testimony that OptumRx 14 has offered to provide, ESI has more than sufficient discovery, particularly at this stage. 15 OptumRx is not a party to the Litigation, so any discovery requests to OptumRx 16 “should be narrowly drawn to meet specific needs for information.” Convolve, Inc. v. 17 Dell, Inc., 2011 U.S. Dist. LEXIS 53641, at *2 (N.D. Cal. May 9, 2011);; see also Dart 18 Industries Co., Inc. v. Westwood Chemical Co., 649 F.2d 646, 649 (9th Cir. 1980) 19 (noting that when a nonparty “is the target of discovery,” restrictions on discovery 20 “may be broader.”). ESI has not done so here. Even as narrowed by ESI, the Document 21 Subpoena still seeks thirteen categories of documents, which encompass essentially all 22 documents and communications having anything to do with the OptumRx Proposal. 23 See supra, at p. 8. OptumRx objected on multiple grounds, including (1) that any 24 relevant documents in Anthem’s possession should be obtained from Anthem, (2) that 25 documents not shared with Anthem are irrelevant, and (3) alternatively, that any 26 hypothetical marginal relevance of documents that were never sent to Anthem could not 27 outweigh the burden, expense and potential competitive harm to OptumRx. See Potter 28 Declaration, Ex. 1 (Objections and Responses to Document Subpoena). Based on these -14- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 17 of 24 1 objections—including that all of the potentially relevant documents would be in 2 Anthem’s possession—OptumRx did not agree to produce any documents in response 3 to the Document Subpoena. 4 The Deposition Subpoena seeks testimony about a variety of topics related to the 5 OptumRx Proposal. See generally, Potter Declaration, Ex. 2 (OptumRx Objections and 6 Responses to Deposition Subpoena). OptumRx objected on multiple grounds, stating 7 that it would not permit a witness to testify about (i) the underlying analyses behind the 8 OptumRx Proposal, including any analysis of the associated profit or loss, (ii) drafts or 9 earlier versions of the OptumRx Proposal, and (iii) highly-confidential, proprietary, 10 commercially sensitive, and/or trade secret information of OptumRx. Id. OptumRx 11 responded that it would permit a witness to answer questions concerning the OptumRx 12 Proposal, including: (i) how and when the negotiation process began; (ii) OptumRx’s 13 understanding of the purpose of the Proposal and Anthem’s use of the Proposal; (iii) the 14 nature of the communications with Anthem regarding the Proposal; (iv) the information 15 and assumptions provided by Anthem used in preparing the Proposal; and (v) why 16 OptumRx provided the Proposal, including the general benefits that OptumRx believed 17 it would have gained if the Proposal were accepted. See id. Accordingly, OptumRx 18 has already offered to provide more than sufficient testimony about the OptumRx 19 Proposal. 21 Relevant Documents About the OptumRx Proposal Should be Obtained from Anthem, and Internal Highly Confidential OptumRx Information Not Shared with Anthem is Not Discoverable. 22 ESI’s motion should be denied to the extent it seeks information from OptumRx 20 A. 23 that was exchanged with Anthem; namely, the OptumRx Proposal and related 24 communications between OptumRx and Anthem. Even if these documents are 25 discoverable under Rule 26(b)(1), that alone is insufficient to require production by 26 OptumRx because such discovery can be obtained from Anthem. See Fed. R. Civ. P. 27 26(b)(2)(C)(i) (“the court must limit the . . . extent of discovery otherwise allowed by 28 these rules . . . if it determines that: (i) the discovery sought is unreasonably cumulative -15- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 18 of 24 1 or duplicative, or can be obtained from some other source that is more convenient, less 2 burdensome, or less expensive”). Indeed, when information sought from a nonparty is 3 obtainable from a party, it is proper to limit discovery from the nonparty. See, e.g., 4 Amini Innovation Corp. v. McFerran Home Furnishings, Inc., 300 F.R.D. 406, 410 5 (C.D. Cal. 2014) (“[a] court may prohibit a party from obtaining discovery from a non6 party if that same information is available from another party to the litigation.”) 7 (citation and quotation marks omitted); Nidec Corp. v. Victor Co. of Japan, 249 F.R.D. 8 575, 577 (N.D. Cal. 2007) (quashing subpoena that sought information that was 9 “obtainable from a source more direct, convenient, and less burdensome—namely, 10 from Defendants”). Here, the relevant documents concerning the OptumRx Proposal 11 are obtainable from Anthem, as demonstrated by ESI’s own submission to this Court, 12 which attaches documents regarding the OptumRx Proposal that ESI obtained from 13 Anthem. 14 ESI’s motion also should be denied to the extent it seeks internal information 15 about the OptumRx Proposal. Such information is beyond the scope of allowable 16 discovery for multiple reasons. To begin, these documents are entirely irrelevant to the 17 issue of whether the OptumRx Proposal is reflective of competitive benchmark pricing, 18 which focuses on the pricing available in the marketplace, not how or why a particular 19 service provider determines to offer such pricing. ESI itself has defined “competitive 20 benchmark pricing” as “pricing that is commercially available in the marketplace to 21 similarly situated customers for similar products and services, taking into account 22 difference between those customers, products, and services.”6 The internal processes, 23 procedures, and analysis utilized by OptumRx to formulate the Proposal do not shed 24 any light on this definition, which focuses on the pricing, products and the customers. 25 26 6 Declaration of Jonathan Montcalm (“Montcalm Decl.”) Ex. A, (Transcript of April 26, 2017 Hearing 27 on Discovery Dispute in the Litigation, Case No. 1:16-cv-02048-ER (S.D.N.Y.) [ECF No. 69]) 28 (“4/26/17 Hearing Tr.”) at 10:1-11. -16- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 19 of 24 1 Next, even if OptumRx’s internal documents could further inform whether the 2 Proposal is consistent with competitive benchmark pricing, that information would still 3 not be discoverable because it is unreasonably cumulative. See Fed. R. Civ. P. 4 26(b)(2)(C)(i). ESI already has the OptumRx Proposal. It knows what services 5 OptumRx was offering and at what prices. It also has all of the inputs provided to 6 OptumRx by Anthem for use in formulating the Proposal (or can obtain them from 7 Anthem). It also has all of its own data about servicing Anthem since 2009, as well as 8 other market data that it has agreed to produce7 and which it undoubtedly possesses 9 given that it is the largest PBM in the country. Moreover, OptumRx has already agreed 10 to produce a witness to testify about the OptumRx Proposal, including the process that 11 led to it, the assumptions Anthem asked OptumRx to use in preparing it, and the 12 reasons why OptumRx provided it. Requiring any more discovery from OptumRx 13 would add nothing. 14 Alternatively, even if OptumRx’s internal information had some relevance, it still 15 would not be discoverable because the potential harm to OptumRx outweighs any 16 alleged benefit to ESI. When conducting the balancing test under Rule 45, the 17 “unwanted burden thrust upon non-parties . . . is a factor entitled to special weight . . . 18 .” Amini Innovation Corp., 300 F.R.D. at 409 (citation and quotation marks omitted). 19 The balance tips further in favor of a nonparty where, as here, the discovery sought is 20 confidential commercial information. See Fed. R. Civ. P. 45(d)(3)(B)(i) (a court may 21 modify or quash a subpoena if it requires “disclosing . . . confidential research, 22 development, or commercial information”); Monterey Bay Military Hous., LLC v. 23 Pinnacle Monterey LLC, 2015 U.S. Dist. LEXIS 45527, at *9 (N.D. Cal. Apr. 7, 2015) 24 (denying motion to compel production of confidential business information where party 25 26 7 Montcalm Decl. Ex. A, 4/26/17 Hearing Tr., 24:24-25:6 (ESI’s counsel states that ESI has “agreed to produce all internal studies, reports, analyses, assessments concerning competitive pricing, 27 competitive benchmark pricing, market pricing, benchmark pricing, and the market for PBM 28 insurance”). -17- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 20 of 24 1 seeking discovery failed to demonstrate a substantial need for that information). And 2 where, as here, that confidential commercial information is sought from a direct 3 competitor, the balance should further favor the nonparty. Cf. Waymo LLC v. Uber 4 Techs., Inc., 2017 U.S. Dist. LEXIS 132721, at *11 (N.D. Cal. Aug. 18, 2017) 5 (quashing subpoena to nonparty competitor where defendant failed to show a 6 substantial need for that information). 7 OptumRx’s processes and procedures for formulating proposals for the provision 8 of PBM services are highly confidential, and result in the creation of sensitive 9 information proprietary to OptumRx, including internal deliberations, communications, 10 and analyses. Declaration of Michael F. Edwards, (“Edwards Decl.”) ¶ 5. OptumRx 11 does not disclose to third parties these internal processes and procedures, nor the 12 sensitive proprietary information created through their implementation. In particular, 13 OptumRx does not disclose this information to either potential clients or competitors. 14 Id. ¶ 6. Accordingly, to tip the balance in its favor, ESI must demonstrate a substantial 15 need for OptumRx’s internal documents about the Proposal that cannot otherwise be 16 met without undue hardship. See, e.g., Monterey Bay, 2015 U.S. Dist. LEXIS 45527, at 17 *9. It has failed to do so. 18 ESI bases its entire effort to establish a need for OptumRx’s internal documents 19 on an outlandish theory that OptumRx only provided the Proposal to assist Anthem in 20 manufacturing evidence in the Litigation. As evidence of this alleged illicit 21 undertaking, ESI relies on three pieces of information: (i) that Anthem solicited the 22 Proposal after the Litigation had commenced; (ii) that the OptumRx Proposal covered 23 the same time period remaining in the Agreement between Anthem and ESI; and (iii) 24 that OptumRx expressly agreed to permit Anthem to use the OptumRx Proposal in the 25 Litigation. None of these facts support ESI’s theory. 26 First, that Anthem allegedly solicited the Proposal from OptumRx after the 27 Litigation commenced does not cast a pall on the solicitation. In the Litigation, 28 Anthem seeks a declaration terminating its Agreement with ESI. If Anthem were to -18- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 21 of 24 1 succeed, it would need to be prepared to substitute a different PBM. That is why 2 Anthem sought the proposal from OptumRx. See Edwards Decl. ¶ 3 (“During those 3 discussions, OptumRx understood that Anthem was engaged in a dispute with [ESI], 4 and that Anthem was seeking bids for the provision of PBM services in the event that 5 its contract with ESI was terminated.”). OptumRx was merely attempting to win new 6 business, and nothing more. 7 Second, the OptumRx Proposal covered the same time period as that remaining 8 on the Anthem/ESI Agreement because Anthem was seeking bids to replace ESI in the 9 event its contract with ESI was terminated. See Edwards Decl. ¶ 3. The OptumRx 10 Proposal provides terms through 2019 because ESI was supposed to provide PBM 11 services to Anthem through 2019. This does not mean that Anthem and ESI 12 manufactured the Proposal solely for the Litigation. It means that Anthem was seeking 13 proposals in case it had to replace ESI. 14 Third, the amendment to the non-disclosure agreement between OptumRx and 15 Anthem does not constitute OptumRx inserting itself into the Litigation nor indicate 16 that its Proposal was not genuine. As is customary for OptumRx when discussing a 17 potential business relationship, Anthem and OptumRx executed an NDA. Edwards 18 Decl. ¶ 4. After the Litigation had commenced, and after ESI had served its document 19 requests to Anthem in May 2016,8 the NDA was amended to permit Anthem to produce 20 information regarding its discussions with OptumRx, see Edwards Decl. ¶ 4. ESI 21 undoubtedly requested information from Anthem regarding any discussions with ESI’s 22 competitors, and the NDA amendment made it possible for Anthem to produce those 23 documents without requiring a court order. The NDA amendment was nothing more 24 than a required step to allow Anthem to produce documents requested by ESI in the 25 Litigation. 26 8 Montcalm Decl., Ex. B (Civil Case Discovery Plan and Scheduling Order, Case No. 1:16-cv- 27 02048-ER (S.D.N.Y.) [ECF No. 30]) ¶ 6 (noting that first requests for the production of documents 28 were to be served on or after May 25, 2016). -19- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 22 of 24 1 In sum, ESI has failed to establish its entitlement to internal OptumRx 2 information about the OptumRx Proposal that was not shared with Anthem. The 3 information is highly confidential, and the only need proffered by ESI is based on 4 unsupported accusations. Any relevant documents can and should be obtained from 5 Anthem. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 B. Requiring the Production of Highly Confidential Internal OptumRx Information Would Impose an Undue Burden. ESI argues that OptumRx has failed to articulate any undue burden associated with responding to the Subpoenas because it has not provided details about the burden and has not engaged in discussions regarding potential reimbursement by ESI. This contention misses the mark. Where, as here, information beyond the scope of allowable discovery is sought, compelling the production of such discovery by a nonparty “necessarily imposes an undue burden or expense.” Rodriguez v. El Toro Med. Inv'rs P'ship, 2017 U.S. Dist. LEXIS 76615, at *7 (C.D. Cal. May 11, 2017) (citations omitted). OptumRx has consistently maintained its position that it should not have to produce documents that ESI can obtain from Anthem, nor should it have to produce internal confidential documents and related testimony because such discovery is irrelevant, and would subject OptumRx to severe competitive harm. In other words, the very act of producing irrelevant documents, particularly when the production of those documents would subject OptumRx to competitive harm, imposes an undue burden. It is thus irrelevant that OptumRx has not articulated a specific dollar cost or provided specific details about the financial burden that would be associated with such production. C. The Competitive Harm that Would Befall OptumRx Justifies OptumRx’s Objections to Producing Internal Highly Confidential Information. In further reliance on its meritless contention that OptumRx only provided the OptumRx Proposal for use in the Litigation, ESI argues that OptumRx cannot rely on claims of competitive harm. As discussed above, ESI’s theory is baseless. Anthem and -20- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 23 of 24 1 OptumRx amended their NDA to permit the production by Anthem of documents 2 pertaining to the OptumRx Proposal because those documents were relevant to the 3 Litigation (and undoubtedly requested by ESI). That OptumRx was aware of the 4 Litigation does not mean that OptumRx has opened itself up to all manner of discovery 5 into its internal processes for formulating bids. A potential client sought a proposal 6 from OptumRx, and OptumRx provided that Proposal. The existence of the Litigation 7 at the same time these discussions were taking place does not transform these routine 8 business activities into evidence of a conspiracy to manufacture evidence. ESI must 9 demonstrate a greater need for OptumRx’s highly confidential documents to overcome 10 the harm associated with disclosure of those documents. See, e.g., Monterey Bay, 2015 11 U.S. Dist. LEXIS 45527, at *9. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -21- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION Case 1:17-mc-00458-ER Document 2 Filed 10/27/17 Page 24 of 24 1 Dated: October 27, 2017 Respectfully submitted, 2 QUINN EMANUEL URQUHART & SULLIVAN LLP 3 4 5 By /s/ James R. Asperger James R. Asperger (Bar No. 083188) jimasperger@quinnemanuel.com 865 S. Figueroa St., 10th Floor Los Angeles, California 90017 Telephone: (213) 443-3000 Facsimile: (213) 443-3100 Attorney for Express Scripts, Inc. 6 7 8 9 10 11 12 13 Dated: October 27, 2017 Respectfully submitted, DORSEY WHITNEY LLP 14 15 16 By /s/ Bryan M. McGarry Bryan M. McGarry C.A. Bar No. 258156 600 Anton Boulevard, Suite 2000 Costa Mesa, California 92626 Telephone: (714) 800-1430 Facsimile: (714) 800-1499 Attorney for Non-Party OptumRx, Inc. 17 18 19 20 21 22 C.D. Cal. L. R. 5-4.3.4(a)(2) Attestation 23 Pursuant to Local Rule 5-4.3.4(a)(2), I attest that all other signatories listed, and on 24 whose behalf the filing is submitted, concur in the filing’s content and have 25 authorized the filing. 26 /s/ James R. Asperger James R. Asperger 27 28 -22- JOINT STIPULATION RE: DEFENDANT AND COUNTER-PLAINTIFF EXPRESS SCRIPTS, INC.’S MOTION TO COMPEL NONPARTY OPTUMRX, INC. TO COMPLY WITH SUBPOENA DUCES TECUM AND TO TESTIFY AT DEPOSITION