Caveat Emptor….

That’s the take-away that we glean from the Transobturator Sling Products MDL, where the court recently granted in part and denied in part a motion to quash a subpoena served on a non-party former competitor (!!) of the device manufacturer that’s a defendant in that MDL.

Here’s the back story:  the defendant in this MDL is Mentor Corporation. Mentor manufactured a medical device called “Obtape,” a sling designed to treat female stress urinary incontinence. Ethicon, Inc., a wholly-owned subsidiary of Johnson & Johnson, manufactures a competing product, “Gynecare TVT.” Mentor’s Obtape was removed from the market in 2006 amid concerns about serious complications arising from the device’s use, and … well, you can guess what happened after that.

Fast-forward three years, and plaintiffs in the Transobturator Sling Products MDL, apparently having exhausted all possible discovery against the defendant, issued a subpoena to Ethicon – the competitor. Plaintiffs asked for a number of items, including:

1) testimony and documents regarding statements Ethicon made in a TVT product pamphlet entitled “Selecting the Right Mesh:  Important properties of implant materials used in urogynecological surgery” (“Pamphlet”); 2) testimony and documents regarding Mentor’s 510(k) application to the Food and Drug Administration (“FDA”), in which Mentor claimed that ObTape is the substantial equivalent of TVT; and 3) testimony and documents regarding all testing that was conducted on TVT, including published clinical trials and internal Ethicon studies.

Order at 2.

Ethicon, naturally, objected on grounds that evidence relating to its TVT device was not relevant, that the subpoena called for Ethicon to provide gratis expert testimony about Mentor’s application to the FDA for approval of the Obtape device, and that the subpoena was unduly burdensome and sought highly confidential and trade secret materials.

The Court’s January 14 Order agreed with Ethicon that it was not required to provide “unretained expert opinions” regarding Mentor’s application to the FDA, but otherwise, the Court required Ethicon – a non-party to the litigation – to provide the information sought in the subpoena. The Court found the evidence about Ethicon’s Gynecare TVT was “relevant” because plaintiffs said that Ethicon’s product was the “gold standard” and thus was a feasible alternative design. Order at 4. The Court also found the evidence relevant to Mentor’s defenses that the Obtape was “state of the art,” that Mentor complied with existing industry standards, and that there was no feasible safer alternative design to the Obtape. Id.

But how did the Court get around the seemingly insurmountable trade secret and confidentiality concerns raised by Ethicon with respect to its internal studies? Here’s where that old saw, caveat emptor, comes into play – because Johnson & Johnson (aka Ethicon’s parent) purchased Mentor in early 2009. Therefore, the Court reasoned, “the present record does not reveal the basis for the contention that a need presently exists to protect the disclosure of Ethicon information from Mentor since both entities are currently owned by the parent company, and thus presumably are no longer competitors.” Order at 10.

The “good news” (in the silver lining sense), at least for the rest of us, is that the court made it pretty clear that the decision was controlled by the fact that Mentor and Ethicon are now related entities and no longer competitors, Order at 10 n.3, so this opinion should not be used as a vehicle to willy-nilly subpoena trade secret and confidential documents from non-party competitors.  Be thankful for small favors.

It is also “good news” of a sort that the court had the sense to extend the protection of the protective order to Ethicon’s documents.  At least non-parties dragged into litigation, have the same confidentiality rights as the defendant that made the allegedly defective product.

But how about making plaintiffs pay costs for this sort of fishing expedition into a non-party’s files?  Heck, we think they ought to write that into the next revision of the Federal Rules.

The bad news (in the dark cloud sense), of course, is that this is another example of a court not fully appreciating the burdens imposed when it blesses overbroad requests that target sensitive materials, as well as the potential for mischief and misuse that lurks whenever a court orders confidential documents to be produced to the bad guys. And regardless of the court’s statements limiting the scope of this decision, you can bet that aggressive plaintiffs’ lawyers could try to abuse this opinion in the future. But if those lawyers try to sell this opinion as a broad mandate on sweeping non-party discovery, it will be up to the defense to educate the court – beware what the plaintiffs’ lawyers are selling.