Xiao Wei Yang Catering Linkage in Inner Mongolia Co., Ltd. et al. v. Inner Mongolia Xiao Wei Yang USA, Inc. et al. (15-cv-10114).

A number of discovery disputes boiled over in a suit involving a Chinese hot-pot restaurant chain and a Boston restaurant who had tried to become its first American franchisee, resulting in the award of sanctions against plaintiffs’ attorney.  Magistrate Judge Kelley is requiring the attorney to pay the defendants’ reasonable fees and costs for their work on a motion for a protective order and to quash subpoenas issued by the plaintiffs.  Limited discovery had been allowed, to determine whether a forum selection clause in the franchise agreement had been triggered, which would require the bulk of the claims to be brought in China.  A series of disputes over discovery arose, in which plaintiffs’ attorney repeatedly refused to meet and confer.  Among the charges were that the attorney noticed numerous third party subpoenas seeking financial discovery well outside the bounds of the limited discovery that had been permitted at a time when the defendants were negotiating a resolution of a dispute concerning plaintiffs’ attempt to get this information directly from the defendants.    Judge Kelley indicated that this is an improper attempt to circumvent the legitimate objections of the defendants to the discovery, and that plaintiffs should have moved to compel if they believed the objections to lack validity.  She criticized plaintiffs’ arguments that defendants lacked standing to challenge third party subpoenas as “plainly without merit.”  Perhaps most damaging, plaintiff itself cross-moved for sanctions, accusing defendants’ attorney of frivolous and vexatious conduct, obstruction of discovery, and “potentially falsifying discovery documents,” an allegation that he admitted at oral argument was entirely without basis.

Shire LLC et al. v. Abhai, LLC (15-cv-13909).

Judge Young issued findings of fact, rulings of law, and an order for judgment following the bench trial in this litigation involving Abhai’s Abbreviated New Drug Application for a generic version of the extended-release ADHD drug Adderall XR.  Judge Young found Abhai infringed Shire’s RE42,096 and RE41,148 patents, and that the patents were valid.  He also determined that Abhai had conducted litigation misconduct in failing to reveal errors in its stability dissolution testing or supplement its discovery  responses with the corrected data in a timely fashion.  Abhai’s 30(b)(6) witness, Dr. Namburi, was deposed in October, 2016, and was questioned at length about the dissolution data, showing how much drug dissolved over time.  This questioning triggered concerns in Dr. Namburi’s mind over the veracity of the test results (and thus of his testimony).  Over the next several days, he and others at Abhai determined that the testing was conducted improperly, as a result of ambiguities in the written protocol Abhai was using.  By the end of the month, the protocols had been revised and the samples retested.  Abhai withheld this revised protocol in discovery responses made in November, and Dr. Namburi did not make note of this error when signing an errata report for his deposition that month.  Abhai also failed to supplement its prior discovery responses to include the revised protocol or new test data, apparently because no one at Abhai informed Abhai’s attorneys of these errors.  Abhai’s attorneys were not notified until March 31, 2017, of the mistakes; the notified the court (and, for the first time, the FDA) the following business day, after five trial days had occurred.  Judge Young determined that Dr. Namburi knew of the importance of the dissolution data to the case, as he was central in assisting Abhai’s attorneys in preparing for the trial, and that as a member of Abhai’s management, his actions were attributable to the company as a whole.  Judge Young ordered sanctions in the form of attorney’s fees for time Shire spent dealing with the inaccurate data and other alleged litigation misconduct, and for dealing with the revised dissolution data that Abhai sought to introduce mid-trial.  He further sanctioned Abhai $30,000 to be paid to the court as a sanction for wasting five days of the court’s valuable time and resources.  Finally, he ordered the clerk to send a certified copy of his opinion to the General Counsel of the FDA for their further consideration.