matter of opioid litig.matter of opioid litig. 2020 ny slip op 30935(u) april 9, 2020 supreme court,...

Matter of Opioid Litig.2020 NY Slip Op 30935(U)

April 9, 2020Supreme Court, Suffolk County

Docket Number: 400000/2017Judge: Jerry Garguilo

Cases posted with a "30000" identifier, i.e., 2013 NY SlipOp 30001(U), are republished from various New York

State and local government sources, including the NewYork State Unified Court System's eCourts Service.

This opinion is uncorrected and not selected for officialpublication.

FILED: SUFFOLK COUNTY CLERK 04/13/2020 10:53 AM INDEX NO. 400000/2017

NYSCEF DOC. NO. 5644 RECEIVED NYSCEF: 04/13/2020

1 of 7

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF SUFFOLK --------------------------------------------------------------------x

IN RE OPIOID LITIGATION

--------------------------------------------------------------------x

E-FILE

Index No. 400000/2017

DECISION & ORDER

ORIG. RETURN DATE: 3/ 18/20 FINAL SUBMITTED DATE: 3/ 18/20 MOTION SEQ# 218, 235 MOTION: MD

DECISION ON MOTION SEQUENCE NOS. 218 AND 235

On February 28, 2020 the Defendants moved pursuant to CPLR 31261 to preclude Plaintiffs from submitting evidence regarding BNE and/or for the Court to impose an adverse inference and to adjourn the trial date so as to permit them to review documents that were not available during depositions and motions for summary judgment and to conduct follow-up discovery. The motion is based on "the State ' s repeated noncompliance with the Court ' s decisions and orders regarding the Bureau of Narcotic Enforcement documents".

On March 9, 2020 the State cross-moved to reargue the Court's January 22, 2020 order (NYSCEF Doc. No. 3303) and its February 20, 2020 order (NYSCEF Doc. No. 3915) requesting that portions of the January 22, 2020 order and the February 20, 2020 order be vacated.

Defendants argue that the State violated four separate orders requiring the production of . documents from certain Bureau of Narcotic Enforcement ("BNE") custodians. Those orders were rendered on November 25, 2019, January 3, 2020, January 22, 2020, and February 20, 2020. The latter three orders directed the State to produce documents related to the BNE. Mr. Vinciguerra, the witness who the State indicated would be able to answer the questions regarding that agency, was deposed on February 28, 2020 and March 5, 2020. The State's production was not complete at that time. The State has maintained that the BNE documents and testimony are irrelevant to its public nuisance liability cause of action, yet the Defendants assert that the documents establish exculpatory information that will aid and assist in their defense at trial. Defendants claim that the documents requested and directed by the Court to be produced bear directly on the State ' s allegations that the Defendants failed to comply with the New York State Controlled Substances Act ("NYCSA"). Thus, Defendants argue, that the failure to produce those documents in violation of the Court orders should result in an order precluding the State from asserting that the Defendants violated any provisions of the NY CSA and its corresponding regulations and that the State of New York was not aware of and/or did not approve Defendants'

1 Defendants ' moving papers mistakenly referred to the provision as CPLR "3216" (dismissal for want of prosecution). It is clear by Defendants ' submissions that Defendants ' repeated citation to CPLR "3216" instead of CPLR "3126" in their moving papers was a typographical error, as the argument and authorities presented by Defendants refer to CPLR 3 126, and the papers in opposition and in reply refer solely to argument and authorities based on CPLR 3 126, and. not CPLR 3216.

[* 1]



2 of 7

distributions of controlled substances in New York; and/or an adverse inference, or, at a minimum, preclude the Plaintiffs from asserting anything contrary to the following:

l- "the State of New York, acting through BNE, licensed Defendants during the entire relevant time period and certified that they had given satisfactory evidence that all qualifications as required by the NYCSA and its regulations had been met. BNE had all the information it needed to make a fully informed decision to issue these licenses and certifications at the time they were made,"

2- " [t]he State of New York, acting through BNE inspections and licensing approvals, confirmed that Defendants were in compliance with all applicable state and federal laws at all times they operated in the State of New York,"

3- " [t]he State of New York, acting through BNE, regularly inspected Defendants' facilities and found that Defendants ' suspicious order monitoring systems complied with the NY CSA at all times they operated in the State of New York during the time period of the Complaint," and

4- "Defendants were at all times compliant with their obligations regarding suspicious order reporting, theft and loss reporting, and MADOCS transactional data reporting."

Defendants also asked that the Court adjourn the trial date by one month to allow Defendants to review the documents, and propose adverse inferences (and at, a minimum, the above requests for preclusive orders) against the State for its failure to comply with its discovery obligations and with the orders of the Court.

Note that the Defendants' application pre-dates the executive orders of the Office of Court Administration which has delayed the trial making that portion of the motion moot at this time.

The State argues that the Defendants failed to ask crucial questions during the depositions of Mr. Vinciguerra which establishes that the "ratification" claims do not constitute a substantive validation of Defendants' internal control systems and the accuracy of the statements Defendants made in the license applications. Thus, the State argues that since the deposition established that there is no confirmation that the agency has approved the effectiveness of any of Defendants ' systems, or the truth of any of the Defendants' representations about the qualifications and knowledge of the people it identifies as being responsible for controlled-substance compliance, there is no actual prejudice to the Defendants and the demands for BNE documents is rendered moot. The State claims that " [b]ecause Mr. Vinciguerra' s deposition was the ultimate opportunity for Defendants to demonstrate to the Court why it actually needed the documents in question, and Defendants declined to do so, the Court should dismiss Defendants' motion as being mooted by their own conduct." The State also asserts that the Defendants did not reserve any rights indicating that the deposition should be continued or held open.

The State further argues that the motion must be denied as there is no proof that any alleged failure to comply with the prior discovery orders was willful and contumacious. Further, the State interprets Defendants need for the BNE discovery as an attempt to establish defenses that are not valid (also citing its current motion to dismiss the affirmative defenses). The State

[* 2]



3 of 7

says that since ratification or any other equitable defense is legally unavailing in a public nuisance action brought by governmental entities, the purported awareness of the BNE of Defendants (alleged) conduct is unsupported by testimony from Defendants' own employees. The State argues that the Defendants cannot show willful and contumacious conduct which is a necessary showing for Defendants to prevail, but in any event, the State argues that Defendants cannot prevail because they do not make another requisite showing - a showing of prejudice.

The State also argues that Defendants' motion is premature in that the February 20, 2020 order "expressly contemplated ' rolling ' productions to be completed 'no later than March 13, 2020 ' should the State not meet the initial February 24 date for production."

As to the application to reconsider the prior January 22 and February 20 orders, the State sets forth three reasons for its request, as it argues that:

I. Since Plaintiffs motion to dismiss the affirmative defenses is a dispositive issue, and the legal validity of the equitable defenses such as waiver, ratification or !aches are in doubt and it is questionable whether evidence of those claims may even be presented at trial or whether the jury can legally draw adverse inferences on those issues, the failure to adhere to the Court's discovery orders is non-prejudicial to the Defendants.

2. Any "Guidance relating to the Defendants' conduct and duties under the NYCSA" are in Defendants' own custody. Since the Defendants have maintained that any guidance communicated to them would not have the "force of law" or be "entitled to deference", the internal BNE correspondence and workaday e-mails cannot as a matter of law constitute the official position of the State. Moreover, they argue that any internal e-mails do not constitute the actual law.

3. There are errors of law and fact in the prior orders that must be corrected on the record. The State has interpreted the November 25, 2019 and January 3, 2020 orders to not have required them to "specifically" produce custodial files. The State recognizes that the orders did require the State to identify custodians who could testify as to "how the Defendants contributed to the creation of and continuation of the opioid epidemic'', and to "produce Mr. Vinciguerra for deposition and produce those documents that are relevant to his testimony covering the 'subject matter and time periods of all other BNE custodians identified by Defendants."' It is asserted that the January 3, 2020 order did not direct the State to produce specific document custodians. (emphasis added). The February 20, 2020 order stated that as of February 18, 2020, only 9,000 documents had been produced which the State claims is in error and a much larger number of documents had been produced (two large data sets, 59,000 Suspicious Order Reports, hundreds of BNE licensing files, and approximately 57,000 emails, electronic documents and hard copy documents from l 0 BNE employees). It is also alleged that the Court was in error when it provided that '"the State was aware of its obligation' to produce BNE custodial fi les but failed to do so." It is alleged that the State did produce the documents on a rolling basis.

On March 16, 2020, the Defendants submitted their reply in support of their CPLR 3126 motion and in opposition to the State's motion to reconsider the Court's prior orders. They point

[* 3]



4 of 7

out that this is the "fifth" time that the State has argued that it should not be required to produce BNE documents. They believe that the documents thus far produced show that the "BNE was fully aware of Defendants ' conduct and shipments, and yet has consistently certified Defendants compliance with applicable state and federal law." They assert that 500,000 pages of documents were produced after the Vinciguerra depositions, and that he did not review the documents of the other 8 custodians and that he should have been able to address issues of those other custodians.

Defendants take issue with the State's claim that they "folded" at the Vinciguerra deposition in not asking the crucial questions for three reasons:

1- The production was late; 2- The testimony that Vinciguerra did not speak with any of the eight custodians from

whom the State was required to produce documents in preparation for his 11-f deposition, "despite the State's prior representation that his testimony would substitute for depositions of these very same BNE fact witnesses" and that his testimony was to the effect that "he spoke with five individuals for five to 15 minutes each," and that none of them were among the eight custodians previously designated; and

3- Defendants' strategic determination as to questions to be asked during a deposition is not an admission that reference to other information or documents are not relevant.

As an aside, the Defendants inform the Court that the State intends to "claw back" a "key document that Defendants intended to rely on that demonstrated the lengths BNE has gone to ensure that renewal of Defendants' licenses was appropriate". While Defendants indicate their intention to supplement their papers with that document, the issue is not currently before the Court.

The Defendants also take issue with the claim by the State that they did not reserve any rights or assertions that the deposition be held open or continued, however, the States' claim on this issue is belied by the record and the prior Court orders.

In response to the allegation that their motion is premature, Defendants point to a prior decision of the Court which addressed the potential deficiencies in the rolling production and suggesting the possibility of imposition of adverse inferences for any failures in the production.

On the issue of prejudice, the Defendants set forth their reasons of why they have been disadvantaged by the late or non-production as follows: They could not use the non-produced documents (a) during the 11-f deposition; (b) during the fact witness depositions; (c) during depositions of Plaintiffs' expert witness; (d) in preparing their own expert reports; and (d) in their motions for summary judgment. Also, as a result, "Defendants must now devote massive resources to reviewing newly-produced documents."

In response to the State ' s position that the BNE discovery is irrelevant (which the State argued in each of the motions involving the BNE documents, including this motion), that those documents are irrelevant and have no bearing on the State ' s public nuisance cause of action, the

[* 4]



5 of 7

Defendants cite several themes which purportedly establish the relevance and importance of those documents:

1- "Defendants' increased distributions are the natural, reasonable result of the State's efforts to increase opiate prescribing in the 1990s and 2000s." A document produced from the BNE files stated that " ... the spirit" of the recent changes to the Public Health Law "is to increase the prescribing of controlled substances to those in pain." The document was produced on February 28, 2020. Defendants' contend that this "directly refutes the State's claims that that Defendants were unreasonable in supplying prescription opioids to meet ~he demands of increased prescribing that the State encouraged" and that such document contains "many other facts showing that the State intended to encourage and increase opioid prescribing, meaning that any increases in opioid distribution were expected and consistent with the State 's guidance."

2- "BNE was aware of Defendants ' shipments but took no action that would indicate noncompliance." Based on the alleged lack of action to investigate, the Defendants surmise that the " ... BNE reached a different conclusion than the State's purported expert, but Defendants were unable to confront [the expert] with this fact at deposition."

3- "BNE's licensing application process is designed to ensure that licenses are in compliance with state and federal controlled substances laws before licenses are granted." It is alleged that late-produced documents" state that the purpose of BNE' s licensing is to 'ensure that facilities/individuals who are issued controlled substances licenses have demonstrated an ability to maintain effective control against diversion of controlled substances; (and) comply with all applicable laws."' It is also asserted that "newly-produced" documents show that BNE in October 2008 "redesigned its Controlled Substances Licensing Program to more comprehensively document that applicants have satisfied the licensing requirements as outlined in PHL and Part 80."

Defendants in support of their motion allege that they have met their burden of establishing that the non or late production of the BNE documents has so prejudiced them that the orders for preclusion should be granted.

Defendants oppose the State ' s application to reconsider the prior orders of the Court arguing that the Court has already effectively denied similar motions several times. They also correctly assert that any Reply by the State must be limited to the cross-motion and not a surreply to the 3126 application.

Addressing the issues put forth by the State in th~ cross-motion, Defendants respond as follows:

1- The BNE documents are relevant not only to the affirmative defenses but also bear on the elements of Plaintiffs public nuisance cause of action regarding the elements of that claim, such as establishing that:

[* 5]



6 of 7

a. The Defendant substantially and unreasonably interfered with a public right.

b. The Defendant's conduct was unreasonable. c. That conduct was either intentional or negligent. d. Proximate causation.

2- There is no inconsistency in the Court's January 22, 2020 order. 3- Documents showing that "Defendants ' behavior was consistent with

BNE' s understanding of Defendants ' duties substantiates that claim and effectively eliminates any argument that Defendants engaged in intentional or negligent misconduct."

4- There were no errors of fact in the prior Court orders. It is alleged that the State was aware of its obligation to produce BNE documents by the Court's orders long before the January 22, 2020 order and that the discussion of production of documents by the State in the February 20, 2020 order, which the State claims was in error, was in fact correct, as it was based on (mis)representations made to the Court on February 18, 2020 by the State, and that the State ' s later claim in its motion papers of the types, amounts, and number of documents produced is in fact false.

The State submitted its Reply on March 18, 2020 which it labels a Reply in support of its motion to reargue and "In further support of its opposition to Defendants relief under CPLR 3126." The Court will consider only that portion of the submission addressed to the State' s cross-motion and not the further opposition as that is an improper sur-reply which was submitted without Court approval.

First, it should be noted that the affirmation of Monica Hanna, Assistant Attorney General at the New York State Office of the Attorney General , states at paragraph 19 of that document that "as of Friday, March 13, 2020, the State produced all documents relating to the eight additional BNE custodians, with the exception of any documents to be substantially dedesignated as privileged material allowing additional privilege review and documents requiring careful redaction of personal health information or personal identifying information."

At paragraph 20 of that affirmation Ms. Hanna states that "The State currently anticipates completing it supplemental production of any materials relating to the additional BNE Custodians that are properly produced following the remaining limited secondary review, as stated above, within 24 hours of this writing." That writing was filed on March 18, 2020 at 11: 10 PM.

The argument set forth by the State is that the whether the "BNE documents can show the reasonableness of Defendants' conduct is irrelevant because, as the body of case law made clear, · in public nuisance cases, a defendant may be liable for an unreasonable interference in the public ' s health and safety even if the defendant acted non-negligently." The State persists in its position that the discovery of BNE documents is irrelevant in that "BNE could not, as a matter of law or fact, have ratified or otherwise excused Defendants ' nationwide misconduct." It also

[* 6]



7 of 7

appears that the State's basic argument is that the prior Court orders should be reconsidered because the BNE discovery is not relevant and that the fai lures to comply with the Court orders should be excused because there is no obligation on the State to prove fault or negligence in the public nuisance caused of action. Nonetheless, the State points out (with respect to the licensing function of BNE), that "Defendants had to represent whether or not they 'failed to comply with the provisions of the Federal Controlled Substance Act or laws of any State relating to controlled substances' by checking of 'yes' or ' no ' in the box. The State furthers point out in its Memorandum of Law that the "State intends to show that Defendants falsely misrepresented that they had complied with these provisions. Not a single document from the State can absolve Defendants ofrepeatedly making that affirmative representation." The State claims that BNE's "approval of a licensing application or renewal did not constitute a substantive validation or acknowledgment of the efficacy or appropriateness of a registrant' s suspicious order monitoring system."

While the State argues the merits of affirmative defenses and of their own cause of action of public nuisance, they still must establish liability under any definition that the State may put forward. These arguments do not address the current issue of court ordered discovery. It appears to the Court that no matter how innocuous the state claims that the di scovery is, or that such BNE documents cannot support an affirmative defense, the State must still prove its case and establish liability against the Defendants. Therefore, if the Defendants at trial can utilize the information that they obtain through the discovery process, to pursue their case, they are entitled to receive the documents and the previously ordered BNE discovery and be able to use those documents during depositions. Ultimately, the Court will determine at trial whether those documents (the contents thereof) are relevant and/or speculative and admissible.

While it is unfortunate that the courts and the nation are suffering from a slow down due to the Corona Virus situation, the time can be spent in rectifying some of the discovery issues. The applica~ion of the Defendants to adjourn the trial is now moot due to the directive of the Office of Court Administration to delay the trial. The application of the Defendants for adverse inferences and/or to preclude evidence and testimony for failure of the State to comply with Court orders is denied at this time, without prejudice to renew at the time of trial. The Cross -motion of the State to reargue is granted and upon re-argument, the Court adheres to its prior orders. The parties are directed to meet and confer to determine the time and method of continued deposition of Mr. Vinciguerra or another witness with knowledge to testify with regard to the documents provided after the depositions of Mr. Vinciguerra. The depositions shall be limited to questions involving the documents provided by the State after March 5, 2020.

Dated: April q , 2020 ENTER

[* 7]