Juno Therapeutics, Inc. et al. v. Kite Pharma, Inc Case No. CV 17-7639-SJO-KSx United States District Court, C.D. California Filed April 24, 2019 Counsel Morgan Chu, Alan J. Heinrich, Crawford Maclain Wells, Elizabeth Chenyi Tuan, Lauren Nicole Drake, Moon Hee Lee, Irell and Manella LLP, Andrea Weiss Jeffries, Emily Moore Whitcher, Jones Day, Los Angeles, CA, Christopher J. Harnett, Pro Hac Vice, Kevin V. McCarthy, Pro Hac Vice, Sarah A. Geers, Pro Hac Vice, Jones Day, New York, NY, for Juno Therapeutics, Inc. et al. Adam R. Lawton, Edward George Dane, Garth T. Vincent, Graham Berres Cole, Jeffrey I. Weinberger, Peter E. Gratzinger, Munger Tolles and Olson LLP, Geoffrey D. Biegler, Fish and Richardson PC, Los Angeles, CA, Grant T. Rice, Pro Hac Vice, Fish and Richardson PC, Boston, MA, Gregory R. Booker, Pro Hac Vice, Fish and Richardson PC, Wilmington, DE, Lance E. Wyatt, Pro Hac Vice, Fish and Richardson PC, Dallas, TX, Megan Alexandra Chacon, Fish and Richardson PC, San Diego, CA, for Kite Pharma, Inc. Stevenson, Karen L., United States Magistrate Judge ORDER DENYING DEFENDANT'S MOTION TO COMPEL [DKT. NO. 191] INTRODUCTION *1 Before the Court is Defendant Kite Pharma, Inc.'s (“Defendant” or “Kite”) Motion to Compel further production of documents by Plaintiff Juno Therapeutics, Inc. (“Plaintiff” or “Juno”) in response to Defendant's Request for Production Nos. 41, 42, 46, 51, 52, 67, 79, 80, and 81, filed on April 3, 2019 in the joint stipulation format pursuant to Local Rule 37-2 (the “Motion”). (Dkt. No. 191.) On April 8, 2019, Plaintiff filed a Supplemental Memorandum Regarding Defendant's Motion Dkt. No. 199), along with the Declaration of C. MacLain Wells (Dkt. No. 199-1). Also on April 8, 2019, Defendant filed a Supplemental Memorandum in Support of the Motion. (Dkt. No. 200.) On April 12, 2019, the Court held oral argument. During oral argument, the Court received additional evidence from the parties: (1) a letter from Plaintiff's counsel to defense counsel dated April 10, 2019 regarding Plaintiff's document production (Ex. 1); and (2) Defendant's email response to Plaintiff's April 10, 2019 letter (Ex. 2). (See Dkt. No. 205.) The Court also directed defense counsel to submit an amended proposed order outlining the specific relief sought in the Motion. (Id.) At the conclusion of the hearing, the Court took the matter under submission. (Id.) For the reasons outlined below, the Motion is DENIED. RELEVANT BACKGROUND Plaintiffs Juno, Memorial Sloan Kettering Cancer Center, and Sloan Kettering Institute for Cancer Research commenced this patent infringement action against Defendant on October 18, 2017. (Dkt. No. 1.) Plaintiffs allege that Kite unlawfully commercialized a cancer immunotherapy that utilizes a chimeric T cell receptor that was invented, and patented (the “'190 Patent”) by prominent scientists at Sloan Kettering Institute for Cancer Research. (Complaint ¶¶ 8-15.) Juno alleges that it obtained “an exclusive license to the '190 Patent for all therapeutic and diagnostic uses.” (Id. at ¶ 15.) According to Kite, Juno alleges patent infringement damages in excess of $2 billion “based in part on the theory that Kite's allegedly infringing cancer therapy, YESCARTA® has cause a delay in FDA approval of a Juno pipeline product known as JCAR017, has diminished the future sales and profit potential of JCAR017, and has diminished the value of Juno itself as a company.” (Motion at 5 (citing Declaration of Peter E. Gratzinger (“Gratzinger Decl.”) ¶ 4).) Kite contends that any reduced expectations for JCAR017 were the result of Juno's own product development failures and strategic decisions of Celgene, a company that acquired Juno in March 2018. (Motion at 5.) In discovery, Defendant propounded Requests for Production of Documents (“RFPs”), seeking, among other things, documents relating to Juno's damages claims. Juno served its responses to Kite's First Set of RFPs on May 11, 2008 (Gratzinger Decl., Ex. 1) and its responses to Defendant's Second Set of RFPs on September 7, 2018 (Gratzinger Decl. Ex. 2). The close of fact discovery other than depositions was February 15, 2019. (Dkt. No. 128.)[1] *2 On March 15, 2019 and March 21, 2019, the Court held pre-motion telephonic discovery conferences with the parties regarding Kite's concerns that Juno had failed to produce the responsive documents that had agreed to produce in its written responses to the RFPs. (See Dkt. Nos. 154, 168.) At the discovery conference on March 21, 2019, the Court authorized Defendant to bring the instant Motion. (Dkt. No. 168.) THE MOTION At issue is the adequacy of Plaintiff's production of documents in response to Kite's RFP Nos. 41, 42, 46, 51, 67, 79, 80 and 81 (the “Disputed Requests”) “for which Juno has already agreed to produce documents.” (Motion at 4.) Kite maintains that Juno has failed to adequately search for and produce responsive documents from non-email sources. Specifically, Kite seeks an order compelling Juno to “produce certain non-email documents” relevant to Juno's infringement and damage claims and to confirm that it has performed a reasonable and diligent search of both Juno and Celgene's non-email document repositories, “including individual hard drives and shared server locations, that are likely to contain documents responsive to [the Disputed Requests].” (Motion at 4.) A. Kite's Position Kite argues that it “relied on Juno's diligent compliance with its obligations to search non-email Juno and Celgene document sources in order to obtain complete and up-to-date discovery about key issues in the case, particularly with respect to damages.” (Motion at 5-6.) Kite maintains that in meet and confer discussions, Juno has been unwilling to confirm whether it is withholding any documents based on its general objections as to the scope of the Disputed RFPs and has been unwilling to state with clarity whether it has searched both Juno and Celgene sources for responsive documents. (Id. at 6-7.) Kite also argues that it was not until March 18, 2019 that Juno produced several hundred more non-email commercial documents from the past year, i.e., since Celgene's acquisition of Juno in March 2018. (Id. at 7.) In response to Juno's objections that it is not required to produce “every commercial document at Juno,” Kite emphasizes that it merely seeks to “compel production of the full scope of non-email documents that Juno previously agreed to produce.” (Id.) B. Juno's Opposition Juno argues that the Motion is unnecessary and should be denied because Juno has satisfied its discovery obligations. (Motion at 7.) Juno maintains that it has “already performed a good faith reasonable search for non-duplicative materials responsive to [the Disputed Requests].” (Id.) Further, Juno states that it “interviewed key custodians ... collected documents from network drives and other repositories and individuals likely to have responsive documents and confirmed that individual custodians' hard drives are not likely to contain non-duplicative information. (Motion at 7-8.) Juno also states that is “has produced over 225,000 pages of documents collected form non-email repositories and over 1.3 million pages of documents attached to emails. (Id. at 8.) In its written responses to the Disputed Requests, Juno stated general objections to the breadth of the RFPs but “indicated what it was willing to produce” and, in meet and confer discussions with Kite's counsel, “reached other agreements about the scope of the requests[.]” (Id. at 8-9.) Further, Juno confirms that it “is not relying upon unarticulated objections” to withhold responsive documents. (Id. at 9.) *3 Juno argues that Defendant, while claiming that Juno has failed to produce responsive non-email documents, has not identified “particular examples of any actual missing categories of documents.” (Id.) Thus, Juno argues that the Motion is moot because it has met its discovery obligations and Kite has failed to identify actual deficiencies in Juno's production. (Id.) THE DISPUTED REQUESTS The Disputed Requests seek the following documents: RFP No. 41: All competitive intelligence that you have obtained or created that discusses or describes the U.S. market for CAR-T products and the companies and products that compete or may compete in that market. RESPONSE: After stating general and specific objections to this RFP, which the Court will not repeat here, Juno responded to RFP No. 41: ... Juno will produce any non-privileged, non-protected, responsive documents within its possession, custody, or control that relate to competitive intelligence that discusses or describes the U.S. market for anti-CD19 CAR-T products and are located after a reasonably diligent search. RFP No. 42: All documents relating to financial forecasts or market analyses for CAR-T products targeting CD19 or treatment of diffuse large b-cell lymphoma, primary mediastinal B-cell lymphoma, transformed follicular lymphoma, high-grade B-cell lymphoma, mantle-cell lymphoma, acute lymphocytic leukemia, follicular lymphoma, or chronic lymphoblast lymphoma. RESPONSE: After stating general and specific objections, Juno responded to RFP No. 42: ... Juno will produce any non-privileged, non-protected, responsive documents within its possession, custody, or control that are located after a reasonably diligent search. RFP No. 46: All documents relating to or reflecting the profits or profitability of any CART product, including but not limited to profit projections and pricing information. RESPONSE: After stating general and specific objections, Juno responded to RFP No. 46: ... Juno will produce any non-privileged, non-protected, responsive documents within its possession, custody, or control that refer to profitability of JCAR017 and are located after a reasonably diligent search. RFP No. 51: All documents assessing the reasons for the success or failure of JCAR017, including any problems relating to cerebral edema. RESPONSE: After stating general and specific objections, Juno responded to RFP No. 51: ... Juno will produce any non-privileged, non-protected, responsive documents within its possession, custody, or control that are located after a reasonably diligent search. RFP No. 52: All business plans, strategic plans, or business strategy documents relating to JCAR015 and/or JCAR017, including documents showing the facts and circumstances surrounding Juno's decisions to design, research, develop, and abandon JCAR015 and/or JCAR017. RESPONSE: After stating general and specific objections, Juno responded to RFP No. 52: ... Juno will produce any non-privileged, non-protected, responsive documents within its possession, custody, or control that are located after a reasonably diligent search. RFP No. 67: All documents related to actual or potential competition between Juno and (i) Kite, (ii) Novartis, (iii) bluebird bio, or (iv) any other third party with regard to therapeutic cancer products or therapies. RESPONSE: After stating general and specific objections, Juno responded to RFP No. 67: *4 ... Juno will produce any non-privileged, non-protected, responsive documents within its possession, custody, or control that are identified in agreed searches pursuant to the stipulated ESI order in this matter. RFP No. 79: All documents relating to financial forecasts or analyses of demand, supply, pricing, or the market for CAR-T products in the United States targeting CD19 or the treatment of large B-cell lymphoma (including diffuse large B-cell lymphoma), primary mediastinal B-cell lymphoma, transformed follicular lymphoma, high-grade B-cell lymphoma, mantel-cell lymphoma, acute lymphocytic leukemia, follicular lymphoma, acute lymphoblastic leukemia, or chronic lymphoblastic lymphoma. RESPONSE: After stating general and specific objections, Juno responded to RFP No. 79: ... Juno will produce any non-privileged, non-protected, responsive documents within its possession, custody, or control that are identified in agreed searches pursuant to the stipulated ESI order in this matter. RFP No. 80: All documents relating to or reflecting—whether projected or actual—the number of prescriptions, sales, revenue, profits, market share, or profitability of KYMRIAH, JCAR014, JCAR015, JCAR017, or YESCARTA® in the United States, including but not limited to pricing information and projections of the number of prescriptions, sales, revenue, or profits in the United States. RESPONSE: After stating general and specific objections, Juno responded to RFP No. 80: ... Juno will produce any non-privileged, non-protected, responsive documents within its possession, custody, or control that are identified in agreed searches pursuant to the stipulated ESI order in this matter. RFP No. 81: All documents relating to projections for any CAR-T product candidate, including without limitation projected dates of regulatory approvals, probabilities of any such regulatory approval, and projected market size, market share, manufacturing capacity, sales, or profits following approval. RESPONSE: After stating general and specific objections, Juno responded to RFP No. 81: ... Juno will produce any non-privileged, non-protected, responsive documents within its possession, custody, or control that are identified in agreed searches pursuant to the stipulated ESI order in this matter. (See Motion at 13-23.) LEGAL STANDARD Under Rule 26 of the Federal Rules of Civil Procedure, a party may obtain discovery concerning any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case. FED. R. CIV. P.26(b)(1). As amended in December 2015, Rule 26(b)(1) identifies six factors to be considered when determining if the proportionality requirement has been met, namely, the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to the relevant information, the parties' resources, the importance of the discovery in resolving the issues and whether the burden or expense of the proposed discovery outweighs its likely benefit. (Id.) Relevant information need not be admissible to be discoverable. (Id.) Rule 37 provides that “[a] party seeking discovery may move for an order compelling an answer, designation, production, or inspection.” FED. R. CIV. P. 37(a)(3). The party seeking to compel production of documents under Rule 34 has the “burden of informing the court why the opposing party's objections are not justified or why the opposing party's responses are deficient.” Best Lockers, LLC v. American Locker Group, Inc., Case. No. SACV 12-00403 CJC (ANx), 2013 WL 12131586, at *4 (C.D. Cal. Mar. 27, 2013). *5 District courts have broad discretion in controlling discovery. See Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002). When considering a motion to compel, the Court has similarly broad discretion in determining relevancy for discovery purposes. Surfvivor Media, Inc. v. Survivor Productions, 406 F.3d 625, 635 (9th Cir. 2005) (citing Hallet, 296 F.3d at 751). DISCUSSION Kite argues that Juno should be compelled to produce non-email documents responsive to the Disputed Requests. However, on the record before the Court, Kite has failed to identify any specific deficiency in the Juno's production that warrants an order compelling further production. Nor has Kite established that Juno refused or failed to search relevant repositories for particular categories of documents. Rather, Kite's argument is essentially that it would expect to see certain kinds of documents, particularly following the Celgene acquisition in March 2018, and because it does not find those types of documents in the productions to date, Juno must have withheld such documents. However, Kite's argument rests on speculation and is adequately refuted by Juno's statements that it has searched non-email repositories, confirmed with individual custodians, and produced post-acquisition commercial documents. Juno states it “has conducted a reasonable search, produced all responsive, non-duplicative, and non-privileged documents regarding post-acquisition materials relating to JCAR017 that it agreed to produce” and confirms that “it has fully complied with Kite's requests.” (Motion at 8; and see Plaintiff's Supplemental Memorandum regarding Defendant's Motion to Compel Discovery at 4 [Dkt. No. 199].) During oral argument, Juno noted that the parties have continued to meet and confer during the pendency of the Motion and, on April 10, 2019, Juno's counsel sent a letter to Kite identifying by bates-numbers specific documents in its production that are responsive to the Disputed Requests. The Court received Juno's letter as additional evidence and marked it as Exhibit 1 at the hearing. For its part, Kite, presented its April 11, 2019 email response to Juno's April 10 letter as additional evidence related to the parties' further meet and confer communications about the Disputed Requests, which the Court received as Exhibit 2. Kite's email reiterates its concerns that Juno has not adequately searched for or produced documents, particularly commercial documents reflecting revenue projections and forecasts since the Celgene acquisition. But at the hearing, Juno's counsel described the specific repositories that it has searched, gave examples of the types of documents produced since the Celgene acquisition in March 2018, and pointed to specific post-acquisition commercial documents that Juno has produced. As Kite's counsel noted at the hearing, it certainly would have been helpful if Juno had provided the detailed information about its production sooner, i.e., more than two days before the hearing. Nevertheless, the record here is sufficient to satisfy the Court that Juno has indeed conducted a reasonable and diligent search for non-email documents responsive to the Disputed Requests and the Court finds no basis to establish that Juno is withholding relevant responsive documents based on its general objections. Accordingly, the Motion is DENIED. *6 Rule 37 requires that when a motion to compel is denied, the court “must, after giving an opportunity to be heard, require the movant, the attorney filing the motion, or both to pay the party or deponent who opposed the motion, its reasonable expenses incurred in opposing the motion, including attorney's fees. But the court must not order this payment if the motion was substantially justified or other circumstances make an award of expenses unjust.” FED. R. CIV. P. 37(a)(5)(B). Discovery conduct is “substantially justified if it is a response to a genuine dispute or it reasonable people could differ as to the appropriateness of the contested action.” Pierce v. Underwood, 487 U.S. 552, 563 (1988). Here, the parties do not address an award of expenses in the Motion. However, given Juno's unwillingness to fully clarify its position regarding the adequacy of its production in response to the Disputed Requests until the Motion was filed and, more specifically, just days before the hearing, the Court finds that the Motion was substantially justified. As Kite emphasized in its Supplemental Memorandum in Support of the Motion, filed on April 8, 2019, “in its portion of the Joint Stipulation, [Juno] argued for the first time that it has produced all of the documents that it agreed to produce” and this “sudden change in position” came as a surprise to Kite. (Dkt. No. 200 at 1.) Consequently, the Court declines to award expenses against Kite or its counsel. CONCLUSION For the reasons discussed above, the Motion is DENIED. IT IS SO ORDERED. Footnotes [1] Although there have been amendments to the Scheduling Order issued by the Honorable S. James Otero extending the fact discovery deadline, Kite maintains that the deadline for “the deadline for substantial completion” of document production passed on November 16, 2018. (Motion at 5 (citing Gratzinger Decl. ¶ 18, Ex. 15).)