757 F. Supp. 2d 1
D.D.C.2010Background
- FTC filed a petition to enforce an administrative subpoena ad testificandum issued to Paul Bisaro in a modafinil antitrust investigation.
- The investigation concerns reverse-payment settlements under Hatch-Waxman and whether such payments unlawfully extend a brand-name monopoly.
- Cephalon settled with Watson (and Carlsbad) in 2006, delaying generic Provigil until 2012, raising concerns of anticompetitive effects.
- Watson filed a supplemental ANDA for the '346 patent in 2009, potentially creating first-filer exclusivity and affecting market entry for generics.
- FTC sought to depose Bisaro; Respondent moved to quash, and the court referred the petition to Magistrate Judge Kay for a Report & Recommendation.
- Magistrate Judge Kay recommended enforcement; Respondent objected on multiple theories, including improper purpose and overbreadth.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the subpoena is enforceable given information already in FTC’s possession | Bisaro possesses relevant information; testimony sought is not duplicative. | FTC already has the information; deposition would be unnecessary. | Subpoena enforceable; information not clearly in FTC possession. |
| Whether the subpoena was issued for an improper purpose | Investigation legitimate; aimed at anticompetitive agreements affecting relinquishment rights. | Subpoena pressured relinquishment to partner with Apotex; improper motive. | Not proven improper; agency purpose deemed proper. |
| Whether enforcement would be an abuse of process | Subpoena part of legitimate investigation; no improper disclosure of confidential information. | Use of hypotheticals and communications with Apotex show abuse and improper disclosures. | No abuse found; enforcement allowed. |
| Impact of apex/apex-like considerations on deposition of a high-ranking officer | Apex doctrine has limited reach; Bisaro may possess unique knowledge. | Apex doctrine should preclude unless personal knowledge demonstrated. | Apex doctrine not controlling; testimony warranted. |
Key Cases Cited
- Morton Salt Co., 338 U.S. 632 (1950) (agency investigatory power akin to grand jury; faith in investigation)
- FTC v. Carter, 636 F.2d 781 (D.C. Cir. 1980) (not limited by forecast of probable result; broad investigation scope)
- Texaco, Inc., 555 F.2d 862 (D.C. Cir. 1977) (relevance measured against general purposes of investigation; burdened by broadness)
- United States v. Powell, 379 U.S. 48 (1964) (abuse defense to subpoenas; burden on challenger; improper purpose)
- FTC v. Owens-Corning Fiberglas Corp., 626 F.2d 966 (D.C. Cir. 1980) (presumption of regularity and good faith in agency actions)
- Invention Submission Corp., 965 F.2d 1086 (D.C. Cir. 1992) (agency relevancy judgment given deference if not obviously wrong)
- Carter, 636 F.2d 781 (D.C. Cir. 1980) (agency's investigatory scope and purpose; not bound by anticipated charges)