Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In re National Prescription Opiate Litigation

United States Court of Appeals, Sixth Circuit

June 20, 2019

In Re: National Prescription Opiate Litigation.
v.
United States Department of Justice; Drug Enforcement Administration, Interested Parties-Appellees, HD Media Company, LLC (18-3839); The W.P. Company, LLC, dba The Washington Post (18-3860), Intervenors-Appellants, Distributor Defendants; Manufacturing Defendants; Chain Pharmacy Defendants, Defendants-Appellees.

          Argued: May 2, 2019

          Appeal from the United States District Court for the Northern District of Ohio at Cleveland. No. 1:17-md-02804-Dan A. Polster, District Judge.

         ARGUED:

          Patrick C. McGinley, Morgantown, West Virginia, for Appellant in 18-3839.

          Karen C. Lefton, THE LEFTON GROUP, LLC, Akron, Ohio, for Appellant in 18-3860. Sarah Carroll, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Federal Appellees.

          Ashley W. Hardin, WILLIAMS & CONNOLLY, LLP, Washington, D.C., for Distributor, Manufacturer, and Chain Pharmacy Appellees.

         ON BRIEF:

          Patrick C. McGinley, Morgantown, West Virginia, for Appellant in 18-3839.

          Karen C. Lefton, THE LEFTON GROUP, LLC, Akron, Ohio, for Appellant in 18-3860.

          Sarah Carroll, Mark B. Stern, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Federal Appellees.

          Enu Mainigi, WILLIAMS & CONNOLLY, LLP, Washington, D.C., Geoffrey Hobart, COVINGTON & BURLING LLP, Washington, D.C., Mark S. Cheffo, DECHERT LLP, New York, New York, Kaspar J. Stoffelmayr, BARTLIT BECK LLP, Chicago, Illinois, for Distributor, Manufacturer, and Chain Pharmacy Appellees.

          Bruce D. Brown, THE REPORTERS COMMITTEE FOR FREEDOM OF THE PRESS, Washington, D.C., for Amici Curiae.

          Before: GUY, CLAY, and GRIFFIN, Circuit Judges.

          CLAY, J., delivered the opinion of the court in which GRIFFIN, J., joined. GUY, J. (pp. 27-34), delivered a separate opinion concurring in part and dissenting in part.

          OPINION

          CLAY, CIRCUIT JUDGE.

         Intervenors HD Media Company, LLC ("HDM") and The W.P. Company, LLC, d/b/a the Washington Post ("Washington Post") appeal the district court Opinion and Order holding that the data in the Drug Enforcement Administration's Automation of Reports and Consolidated Orders System ("ARCOS") database cannot be disclosed by Plaintiffs pursuant to state public records requests. Intervenors also argue on appeal that the district court erred in permitting pleadings and other documents to be filed under seal or with redactions.

         For the reasons set forth below, we VACATE the district court's Protective Order and its orders permitting the filing of court records under seal or with redactions, and we REMAND to permit the district court to consider entering modified orders consistent with this opinion.

         BACKGROUND

         This interlocutory appeal arises out of a sweeping multidistrict litigation ("MDL"). Plaintiffs in the MDL consist of about 1, 300 public entities including cities, counties, and Native American tribes.[1] Defendants consist of manufacturers, distributors, and retailers of prescription opiate drugs.[2] The United States Department of Justice and Drug Enforcement Administration (collectively, "the DEA") are not parties to the underlying MDL but are involved in this appeal as Interested Parties-Appellees; HDM and the Washington Post are not parties to the MDL but are involved in this appeal as Intervenors-Appellants.

         In the underlying MDL, Plaintiffs seek to recover from Defendants the costs of life-threatening health issues caused by the opioid crisis. The district court presiding over this potentially momentous MDL has repeatedly expressed a desire to settle the litigation before it proceeds to trial. (See, e.g., R. 800, Opinion and Order, Page ID# 18971 (noting that the court's order will assist "in litigating (and hopefully settling) these cases").)[3] President Trump has declared the opioid epidemic a national emergency, and as the district court noted, "the circumstances in this case, which affect the health and safety of the entire country, are certainly compelling." (R. 233, Order Regarding ARCOS Data, Page ID# 1119.)

         The crux of this appeal is the question of who should receive access to the data in the DEA's ARCOS database, and the related question of how disclosure of the ARCOS data would further the public's interest in understanding the causes, scope, and context of this epidemic. The ARCOS database is "an automated, comprehensive drug reporting system which monitors the flow of DEA controlled substances from their point of manufacture through commercial distribution channels to point of sale or distribution at the dispensing/retail level - hospitals, retail pharmacies, practitioners, mid-level practitioners, and teaching institutions." (R. 717-1, Martin Decl., Page ID# 16517.) The data in the database is provided by drug manufacturers and distributors[4] and includes "supplier name, registration number, address and business activity; buyer name, registration number and address; as well as drug code, transaction date, total dosage units, and total grams." (R. 717-1, Page ID# 16517.)

         In an order, the district court aptly characterized the opioid epidemic that provides the tragic backdrop of this case, observing that "the vast oversupply of opioid drugs in the United States has caused a plague on its citizens and their local and State governments." (R. 233, Page ID# 1124.) Continuing its plague metaphor, the district court concluded that

Plaintiffs' request for [production of] the ARCOS data, which will allow Plaintiffs to discover how and where the virus grew, is a reasonable step toward defeating the disease. See Buckley v. Valeo, 424 U.S. 1, 67 [(1976)] ("Sunlight is said to be the best of disinfectants.") (quoting Justice Brandeis, Other People's Money 62 (1933)).

(R. 233, Page ID# 1124-25.) Despite its confidence that disclosing the ARCOS data to Plaintiffs constituted such a reasonable step, the court later rejected the argument that a further reasonable step would be to disclose the data to HDM and the Washington Post (and by extension to the public at large, who would learn about the contents of the ARCOS data via reporting by those entities).

         The full quote from Justice Brandeis that the district court cited is as follows: "Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman." Buckley, 424 U.S. at 67 (quoting L. Brandeis, Other People's Money 62 (1933)). The question before us is whether it was reasonable for the district court to permit only Plaintiffs to examine the data in the otherwise complete darkness created by the Protective Order, or whether the court abused its discretion by denying Intervenors the opportunity to expose the data to the broad daylight of public reporting. For the reasons below, we hold that this denial was an abuse of the district court's discretion.

         The events leading up to this appeal were set into motion when, in the course of the MDL, Plaintiffs subpoenaed the DEA to produce transactional data for all 50 States and several Territories from its ARCOS database. Plaintiffs and the DEA stipulated to a protective order concerning the DEA's disclosure of the ARCOS data. (R. 167, Protective Order, Page ID# 937- 44.)[5] The district court adopted a Protective Order "determin[ing] that any [] disclosure [of the ARCOS data] shall remain confidential and shall be used only for litigation purposes or in connection with state and local law enforcement efforts." (R. 167, Page ID# 937.)

         The Protective Order by its terms covered "ARCOS data" and defined this term to include "any data produced directly from DEA's ARCOS database; any reports generated from DEA's ARCOS database; any information collected and maintained by DEA in its ARCOS database; and any derivative documents that the parties or their employees, agents or experts create using ARCOS data." (R. 167, Page ID# 938.) The Order pertained to documents, as well as electronically stored information. The court restricted the use of the ARCOS data to "mediat[ing], settl[ing], prosecut[ing], or defend[ing] the above-captioned litigation," and "law enforcement purposes," specifically precluding its use "for commercial purposes, in furtherance of business objectives, or to gain a competitive advantage." (R. 167, Page ID# 939.) The Protective Order also authorized the parties to file pleadings, motions, or other documents with the court that would be redacted or sealed to the extent they contained ARCOS data. However, the court noted that if the parties could not agree to a settlement, "[t]he hearing, argument, or trial w[ould] be public in all respects" and there "w[ould] be no restrictions on the use of any document that may be introduced by any party during the trial" absent order of the court. (R. 167, Page ID# 941.) The Protective Order contemplated the return of the ARCOS data to the DEA after dismissal or entry of final judgment. Significantly for purposes of this appeal, the Protective Order stated that if Plaintiffs received requests for any ARCOS data under "applicable Public Records Laws ('Public Records Requests')," Plaintiffs would "immediately notify the DEA and Defendants of the request." (R. 167, Page ID# 942.) After notification, the DEA and Defendants would be able to challenge the Public Records Request by filing their opposition to production of the records with the court.

         After entering this Protective Order and over the objections of the DEA, the district court directed the DEA to comply with Plaintiffs' subpoena by producing ARCOS data pertaining to Ohio, West Virginia, Illinois, Alabama, Michigan, and Florida for the period of 2006 through 2014. (R. 233, Order Regarding ARCOS Data, Page ID# 1104.) Specifically, the DEA was ordered to provide Plaintiffs with Excel spreadsheets identifying

the top manufacturers and distributors who sold 95% of the prescription opiates [] to each State [] during the time period of January 1, 2006 through December 31, 2014 [] on a year-by-year and State-by-State basis, along with [] the aggregate amount of pills sold and [] the market shares of each manufacturer and distributor.

(R. 233, Page ID# 1109.)

         In overruling the DEA's objections to disclosure, the district court found that the DEA had not met its burden of showing "good cause" for not disclosing the data. (R. 233, Page ID# 1111 (citing Fed.R.Civ.P. 45).) The court's reasoning is highly relevant to this appeal. Regarding the interest in disclosure of the ARCOS data, the court found that "the extent to which each defendant and potential defendant engaged in the allegedly fraudulent marketing of opioids, filling of suspicious orders, and diversion of drugs . . . can be revealed only by all of the data." (R. 233, Order, Page ID# 1118.) Regarding the interests in nondisclosure of the data, the court rejected the arguments that "disclosure would reveal investigatory records compiled for law enforcement purposes [and] interfere with enforcement proceedings" and that "disclosure would violate DOJ's policy which prohibits the release of information related to ongoing matters." (R. 233, Page ID# 1119, 1120 (quoting 1:17-op-45041-DAP, R. 101, Page ID# 696, 698).) The court rejected these arguments for three reasons:

First, Plaintiffs seek ARCOS data with an end-date of January 1, 2015. Given that the most recent data is over three years old, it is untenable that exposure of the data will actually or meaningfully interfere with any ongoing enforcement proceeding. Second, the ARCOS data are not pure investigatory records compiled for law enforcement purposes. Rather, the data is simply business records of defendants; these "[c]ompanies are legally required to submit the information" to ARCOS, the database does not include any additional DEA analysis or work-product, and the records are used for numerous purposes besides law enforcement. Indeed, Plaintiffs assert that part of the reason for the opioid epidemic is lack of law enforcement. And third, simply saying that disclosure of ARCOS records dating back to 2006 would detrimentally affect law enforcement does not make it so.

(R. 233, Page ID# 1119 (citation omitted).)

         The court similarly rejected an argument that producing the data would cause Defendants "substantial competitive harm" by revealing "details regarding the scope and breadth of [each manufacturer's and distributor's] market share." (R. 233, Page ID# 1120 (alterations in original) (quoting 1:17-op-45041-DAP, R. 101, Page ID# 697).) The court rejected this objection to disclosure because "the assertion was conclusory and . . . market data over three years old carried no risk of competitive harm." (R. 233, Page ID# 1120.)

         The DEA complied with the court's order and produced the relevant spreadsheets. Production of the ARCOS data allowed Plaintiffs to identify and add as defendants previously-unknown entities involved in the manufacturing and distribution of opioids and to identify and remove as defendants improperly-named entities. The court noted that other benefits of the ARCOS data included "allowing [the litigation] to proceed based on meaningful, objective data, not conjecture or speculation" and "providing invaluable, highly-specific information regarding historic patterns of opioid sales." (R. 397, Secord Order Regarding ARCOS Data, Page ID# 5323.) To expand upon these benefits, the court ordered the DEA to produce further ARCOS data pertaining to "all of the States and Territories" for the same period of 2006 to 2014, with such disclosure being subject to the Protective Order. (R. 397, Page ID# 5323.)

         Once the complete production of the ARCOS data occurred, HDM filed a West Virginia Freedom of Information Act request with the Cabell County Commission seeking the ARCOS data that the county received as a Plaintiff in this litigation, and the Washington Post filed similar public records requests with Summit and Cuyahoga counties in Ohio (also Plaintiffs in this litigation). Pursuant to the Protective Order, the three counties notified the district court, Defendants, and the DEA of the requests, and the DEA and Defendants objected to them.

         The district court granted HDM and the Washington Post limited Intervenor status "for the limited purpose of addressing their Public Records Requests." (R. 611, Briefing Order, Page ID# 14995.) The arguments in the subsequent briefing as to why the Protective Order should or should not be modified to allow disclosure of the ARCOS data pursuant to Intervenors' requests largely tracked the arguments that had been made on the DEA's earlier objection to disclosing the ARCOS data to Plaintiffs: Defendants argued that the ARCOS data "is sensitive from the perspective of both the pharmacies and distributors because it is confidential business information, and it is sensitive from the perspective of DEA because it is crucial to its law-enforcement efforts." (R. 665, Defendants' Br. Opposing Disclosure, Page ID# 16012.) Intervenors argued that the risk of harm to Defendants and the DEA was speculative and conclusory, and that the public had a compelling interest in receiving "a more complete and accurate story" of a national emergency, which the ARCOS data would allow Intervenors to tell. (R. 718, Wash. Post Br. Supporting Disclosure, Page ID# 16534; see also R. 725, HDM Br. Supporting Disclosure, Page ID# 16601-16.)[6] In an Opinion and Order, the district court held that the public records requests must be denied because the requests were barred by the court's Protective Order and Defendants and the DEA had demonstrated "good cause" for the Protective Order's application to such requests, as required under Rule 26(c)(1). (R. 800, Page ID# 18978.) The court specified that its holding extended to all present or future public records requests for the ARCOS data filed with any of the 1, 300 public entity Plaintiffs in the underlying litigation.

         In its analysis, the district court adopted language from Defendants' briefing, noting that the ARCOS data "is sensitive to pharmacies and distributors because it is confidential business information; and it is sensitive from the DEA's perspective because it is crucial to law enforcement efforts." (R. 800, Page ID# 18979-80.) The court further noted that the Freedom of Information Act ("FOIA") "exempts from public disclosure any confidential commercial information, the disclosure of which is likely to cause substantial competitive harm." (R. 800, Page ID# 18980 (citing 5 U.S.C. § 552(b)(4) and Canadian Commercial Corp. v. Dep't of Air Force, 514 F.2d 37, 39 (D.C. Cir. 2008)).) It also found relevant that FOIA exempts "records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement information could reasonably be expected to interfere with enforcement proceedings and criminal prosecutions." (R. 800, Page ID# 18981 (citing 5 U.S.C. § 552(b)(7)).) Finally, the court concluded that the ARCOS data "is not a record generated by the Counties" that would be subject to state public records requests. (R. 800, Page ID# 18981.)

         Intervenors appealed the Opinion and Order to this Court.

         DISCUSSION

         Because the DEA challenges this Court's jurisdiction to hear this appeal, we begin with that issue. We will then address whether the district court abused its discretion in finding "good cause" to support its Protective Order forbidding Plaintiffs to disclose the ARCOS data pursuant to state public records requests. Finally, we will address whether the district court erred in allowing court records to be filed under seal or with redactions.

         I. Jurisdiction

         We determine our own jurisdiction de novo. Abu-Khaliel v. Gonzales, 436 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.