SANDOZ INC., et al., Plaintiffs, v. UNITED THERAPEUTICS CORP., et al., Defendants Civil Action No. 19-10170 (BRM)(LHG) United States District Court, D. New Jersey Signed August 12, 2020 Counsel Steven L. Penaro, Jenny R. Kramer, Alston & Bird LLP, New York, NY, Thomas D. Pease, Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY, for Plaintiff Sandoz Inc. Kevin Harry Marino, John D. Tortorella, Marino Tortorella & Boyle, PC, Chatham, NJ, Thomas D. Pease, Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY, Jenny R. Kramer, Alston & Bird LLP, New York, NY, for Plaintiff RareGen, LLC. Stephen M. Orlofsky, Michael Ray Darbee, Blank, Rome LLP, Princeton, NJ, for Defendant United Therapeutics Corp. Goodman, Lois H., United States Magistrate Judge REPORT AND RECOMMENDATION I. INTRODUCTION *1 This matter comes before the Court by way of a letter request filed by Plaintiffs Sandoz, Inc. and RareGen, LLC (“Plaintiffs”), seeking the appointment of a Special Master to oversee discovery. (“Plaintiffs’ Request”) [Docket Entry No. 201]. Defendant United Therapeutics Corp. (“UTC”) filed an Opposition. (“UTC Opposition”) [Docket Entry No. 203]. Defendant Smiths Medical ASD, Inc. (“Smiths”) filed a separate Opposition. (“Smiths Opposition”) [Docket Entry No. 204]. The Court has considered the parties’ submissions without oral argument, pursuant to Fed. R. Civ. P. 78 and L. Civ. R. 78.1(b). For the reasons set forth below, the undersigned respectfully recommends granting Plaintiffs’ Request to appoint a Special Master to oversee discovery in this matter and to resolve the parties’ current and future discovery disputes. The undersigned also respectfully recommends including the resolution of dispositive motions by Report and Recommendation within the scope of the Special Master's appointment. II. BACKGROUND This lawsuit concerns the sale of drugs used to treat patients diagnosed with pulmonary arterial hypertension. The facts of this case are well known to the parties and were set forth in detail in the Opinion of the Court deciding Plaintiffs’ Motion for a Preliminary Injunction and Defendants’ Motion to Dismiss. [Docket Entry No. 168]. Accordingly, the Court recites only those facts and procedural history necessary to provide background for this Report and Recommendation. III. ARGUMENTS OF THE PARTIES A. Plaintiffs’ Request Plaintiffs jointly request the appointment of a Special Master under Rule 53(a)(1)(C) “to oversee discovery in the above-captioned matter and to assist in resolving the numerous discovery issues that remain outstanding or that may later arise.” Plaintiffs’ Request at 1. They start with the proposition that the undersigned, as a Magistrate Judge, has the authority to appoint a Special Master pursuant to 28 U.S.C. § 636 and L. Civ. R. 72.1. Plaintiffs then argue that the appointment is appropriate because this is a discovery-intensive antitrust suit and UTC has aggressively litigated discovery issues and is expected to continue to do so. Id. Plaintiffs also point out that the undersigned warned the parties during a June 16, 2020 telephonic status conference that it has become increasing difficult for the Court to expedite its treatment of the parties’ numerous discovery disputes given the docket congestion in this District. Id. at 1–2. They argue that the tight discovery schedule in this case and the parties’ interests in reaching a final resolution favor the appointment of a Special Master to maintain the expedited pace despite the parties’ discovery disputes. Id. at 2. Plaintiffs contend that their request is based not just upon the parties’ previous and currently pending discovery disputes, but also upon discovery disputes that can be expected to arise. Id. As evidence of the need for special oversight, Plaintiffs cite the parties’ July 7 discovery dispute letter, and describe additional disputes over which the parties have either reached an impasse or can be expected to reach an impasse shortly. Id. Finally, Plaintiffs request that the Special Master's fees be borne 50% by Plaintiffs and 50% by Defendants. B. Defendants’ Opposition *2 UTC opposes Plaintiffs’ Request, arguing that there is no reason for appointment of a Special Master. UTC Opposition at 1. Specifically, UTC points to the cooperation between the parties and the fact that but for a few small issues, many of which have been resolved without the need for Court intervention, the parties have already engaged in substantial discovery. UTC expresses concern that a Special Master would delay the case and lead to more discovery disputes. Smiths joins in UTC's objection and adds its own concern that there are not likely to be substantial disputes in this case. In addition, Smiths objects to the notion that the fees of a Special Master should be borne equally by Plaintiffs and Defendants, given its view that it has no responsibility for the harms alleged in the Complaint. IV. LEGAL STANDARD Rule 53 provides that a court may appoint a Special Master to “perform duties consented to by the parties” or “address pretrial and posttrial matters that cannot be effectively and timely addressed by an available district judge or magistrate judge of the district.” Fed. R. Civ. P. 53(a)(1). “The appointment of a special master must be limited in scope and is not justified simply because of docket congestion or the complexity of factual and/or legal issues ....” Luppino v. Mercedes Benz USA, LLC, Civ. No. 09-5582, 2013 WL 5025229, at *3 (D.N.J. Sept. 11, 2013) Nevertheless, “[c]ourts in this Circuit have appointed special masters to oversee and facilitate complicated and contentious discovery.” Id. V. ANALYSIS The Court starts with the question of whether the undersigned has authority to appoint a Special Master. Although Defendants did not specifically challenge the authority, the undersigned finds it is not a question worth disputing and therefore addresses the issue by way of Report and Recommendation rather than Order. Next the undersigned turns to the merits of Plaintiffs’ Request. The undersigned agrees with Defendants that appointment of a Special Master is not appropriate in every case, nor can it be justified simply because of congestion in the court or complexity of issues. There needs to be something more. Accordingly, I turn to the background of the case and its current status in order to evaluate whether there is that something more here which would justify appointment of a Special Master. The case was brought in the first instance by Complaint, which was soon followed by a motion seeking expedited discovery in anticipation of the filing of a motion for a preliminary injunction. See Docket Entry Nos. 1, 11, 106. The undersigned began early case management as a result of the motion for expedited discovery, with conferences on May 6 and 7, 2019. After the District Court denied the motions to dismiss and for a preliminary injunction, I conducted an Initial Conference on March 27, 2020. The first strong indication of a problem came shortly before the scheduled June 16, 2020 status conference, when counsel submitted a joint discovery dispute letter after 9:30 p.m. on the Friday before a Tuesday morning conference. That letter was 12 pages; with exhibits it was 373 pages. During the June 16 conference, I reminded counsel that although I was sensitive to the timing concerns in the case, I would not in the future accept such last minute letters, nor could they expect the Court to drop everything on all other cases to address such disputes on short notice. Rather than being admonished to resolve any remaining issues on their own, the parties followed up soon thereafter with additional discovery dispute letters. The next came on July 7, 2020 [Docket Entry No. 200], a 9-page letter from Plaintiffs (192 pages with exhibits), in which Plaintiffs complained that UTC had failed to act cooperatively in discovery. That was soon followed by letters dated July 17, 2020 [Docket Entry No. 209], from UTC seeking discovery from Sandoz; July 21, 2020 [Docket Entry No. 211], from Plaintiffs relating to requests from UTC; July 22, 2020 [Docket Entry No. 212], a Motion to Compel filed by Plaintiffs seeking additional discovery custodians from UTC; as well as several letters in response and reply. See Docket Entry Nos. 218, 220. *3 In light of this history, UTC and Smiths’ objection to the appointment of a Special Master rings hollow. This simply is not a case in which the parties are working cooperatively and without the need for Court intervention. Indeed, in just the past month, the number of dispute letters and filings has convinced the undersigned that a Special Master is not only appropriate but is necessary. The undersigned does not reach this conclusion lightly. Indeed, I am well aware of the costs and potential delay inherent in the appointment. This must be considered, however, in light of the current situation in this District. As is widely known, the District has six judicial vacancies. In 2019, the Judicial Conference found that in addition to the current judgeships (assuming all vacancies were filled), the caseload in this District warrants an additional four new judgeships. Judicial Conference Judgeship Recommendations (2019), https://uscourts.gov/file/25749/download. The shortage of judges, combined with an increasing number of case filings, means that as of March 31, 2019 the District has been carrying a load of 1,066 weighted filings per judgeship. See Recent Recommendations by the Judicial Conference for New Judgeships at 19 Figure 3. This continues to exceed the 600 filings per judgeship definition of a “judicial emergency” by the Conference's definition. “Judicial Emergency Definition,” https://www.uscourts.gov/judges-judgeships/judicial-vacancies/judicial-emergencies/judicial-emergenc.... Based upon the foregoing, it is clear to me that a Special Master will ultimately allow the case to move forward faster and more expeditiously. Any time lost in allowing the Special Master to get up to speed will be made up by the more immediate attention that will be available to the case. Accordingly, the undersigned respectfully recommends that an Order be entered appointing a Special Master in this case. Given the concerns raised by Defendants, the time needed for the Special Master to be appointed and get up to speed on the case, and in light of the current judicial crisis, the undersigned further believes it would be appropriate for the appointment to include not only discovery disputes but Reports & Recommendations on any dispositive motions. My recommendation is specifically intended to include any discovery disputes and dispositive motions that are currently pending, as well as any that may be brought before the Court in this case in the future. To avoid a double layer of appeals or objections, I further recommend that any appeals be made directly to the District Judge in this case, rather than first to the Magistrate Judge and then to the District Judge. Finally, I turn to the concern voiced by Smiths as to the allocation of the Special Master's fees and costs. In my view, it is appropriate for those fees and costs to be shared equally by Plaintiffs and Defendants. Thus, I recommend a 50/50 allocation. I do not address nor do I make any recommendation as to how the parties on either side are to share their own allocation. I leave that to them to work out. As such, by my recommendation, Smiths should take its concerns to UTC to work out an appropriate allocation between Defendants as to how they are to share their portion of the fees and costs. VI. CONCLUSION For the foregoing reasons, and for good cause shown, IT IS on this 12 day of August, 2020, *4 RESPECTFULLY RECOMMENDED that the Court appoint a Special Master in this matter, to rule on all discovery disputes currently pending or that may be raised in the future; and it is further RESPECTFULLY RECOMMENDED that the Special Master also be appointed to issue Reports & Recommendations on any dispositive motions currently pending or that may be filed in the future; and it is further RESPECTFULLY RECOMMENDED that any appeals or objections from decisions or Reports & Recommendations of the Special Master are to be directed to the District Judge rather than to the Magistrate Judge; and it is further RESPECTFULLY RECOMMENDED that all fees and costs associated with the services provided by the Special Master are to be borne equally by Plaintiffs and Defendants, with the distribution between the individual Plaintiffs and between the individual Defendants to be negotiated by the parties.