LIFESCAN, INC., et al., Plaintiffs, v. JEFFREY C. SMITH., et al., Defendants ROCHE DIAGNOSTICS CORPORATION, et al., Plaintiffs, v. JEFFREY C. SMITH., et al., Defendants Civil Action No. 17-5552 (CCC)(JSA), Civil Action No. 19-8761 (CCC)(JSA) United States District Court, D. New Jersey Filed July 30, 2024 Cavanaugh, Dennis, Special Master (Ret.) ORDER & OPINION OF THE SPECIAL MASTER JUDGE DENNIS CAVANAUGH, RET. AS TO PRODUCTION OF ZIONS’ SETTLEMENT AGREEMENT WITH PRIME THERAPEUTICS *1 The matter before the Special Master arises out of a discovery dispute that was addressed at a status conference conducted on July 25, 2024. Plaintiffs LifeScan, Inc. and Roche Diagnostics Corporation/Roche Diabetes Care, Inc. (“LifeScan” “Roche” or “Plaintiffs”) seek to compel Defendant Zions Bancorporation, N.A. (“Zions” or “Defendant”) to produce a settlement agreement between the bank and third-party defendant, Prime Therapeutics. In deciding this issue, the Special Master has reviewed and considered arguments advanced by each side contained in joint letters submitted prior to the status conference, the settlement agreement itself which was provided to the Court by Zions for in camera review; and the arguments advanced orally by the parties at the time of the conference. For the reasons set forth below, the Special Master DENIES Plaintiffs’ request to compel Zions to produce its settlement agreement with Prime Therapeutics. Since the parties are intimately familiar with the circumstances that form the basis of this discovery impasse, the Special Master will dispense with providing a procedural history and factual background and instead directly address pertinent issues. Recently, Zions has settled its third-party action against Prime Therapeutics (“Prime”), one of four pharmacy benefit managers (“PBMs”) involved in this litigation. After learning of the settlement, Plaintiffs sought to determine whether the settlement included a cooperation agreement between Zions and Prime. Plaintiffs then served Zions with a request for production seeking the finalized settlement agreement. Zions refused to produce the document. Consequently, Plaintiffs seek an order compelling the production of the finalized settlement agreement arguing, in part, that Plaintiffs had voluntarily produced their own settlement agreements with certain individual defendants. Additionally, Plaintiffs assert that because the contents of the agreement may be relevant to the issue of witness bias should Zions call Prime witnesses at trial to support its defenses, the agreement should be produced. Zions primarily counters that confidential settlement agreements are presumptively non-discoverable; Plaintiffs have failed to demonstrate the relevance of the settlement agreement; and nothing prevents Plaintiffs from asking questions of trial witnesses related to any incentive to testify for or against a party tied to the settlement agreement. While the Third Circuit has not directly decided this issue, multiple District Courts within the Circuit have consistently found that settlement agreements, as well as documents reflecting settlement discussions, are not discoverable unless the party seeking production demonstrates “a heightened showing of relevance or need.” Rather than setting forth the details of those decisions, the Special Master will address and substantially quote an instructive opinion that includes a detailed, recent analysis of this issue, Kaye v. Nussey, 20-cv-9413, 2022 U.S. Dist. LEXIS 142451; 2022 WL 3227578 (D.N.J. Aug. 10, 2022). This opinion incorporates a number of other pertinent decisions in which this issue was analyzed. *2 Kaye was a medical malpractice/wrongful death action. The plaintiff initiated separate but related actions in a Pennsylvania state court and in the District of New Jersey. The Pennsylvania matter settled. Defendants in the New Jersey District Court action then requested the plaintiff produce a copy of the release. The plaintiff objected, contending the confidential settlement documents were not discoverable. Id. at *4. In seeking the documents, the defendants argued, among other things, the release could be relevant to establishing a witness's bias or prejudice. Id. at *5. In reaching its decision, the court engaged in the following discussion: Fed. R. Civ. P. 26 governs the scope of discovery and provides that “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.” Rule 26 is liberally construed in favor of a disclosure... A motion to compel the production of a settlement agreement, however, implicates both Rule 26 and Federal Rule of Evidence 408. In this context, the liberal provisions of Rule 26 come into direct conflict with Rule 408, which recognizes and seeks to protect the strong public policy of promoting settlement. To this end, Rule 408(a) generally precludes the admissibility and use of settlement-related materials at trial. Thus, while Rule 26 favors production, Rule 408 functions in a manner that limits the use of such materials... The Third Circuit has yet to address this “inherent tension” between Rule 26 and Rule 408. Courts in this District have attempted to reconcile the “two competing rationales” underlying them, however, by requiring a heightened showing of relevance or need.... The practical effect of this is to “switch the burden of proof from the party in opposition to the discovery to the party seeking the information.” Accordingly, a party seeking discovery of settlement-related materials must make a particularized showing that there is a strong need for the information and that the information cannot be obtained otherwise. If the movant satisfies this standard, Courts then balance the movant's “asserted interest and need of the documents” against “the effect that may flow from their discovery.” If the movant is unable to satisfy the standard, no further analysis is necessary. [Id. at 8-9 (citations omitted).][1] The Court found that the defendants had failed to make a particularized showing to compel production and stated that the arguments largely rested on “mere speculation that the confidential Release... will somehow contain information that is either relevant or likely to lead to admissible evidence.” Id. at *9. The court went on to say the defendants’ “broad assertions, without more, [were] insufficient to obtain discovery of a confidential Release” and that the defendants failed to offer any cognizable basis “let alone a particular one, for how or why the Release is likely to shed light on information pertaining to specific types of damages or potential witness bias in this action.” Id. at *9-10. *3 See also, Ford Motor Co. v. Edgewood Props., 257 F.R.D. 418 (D.N.J. 2009); Spear v. Fenkell, 13-cv-02391, 2015 U.S. Dist. LEXIS 83790, 2015 WL 3947559 (E.D. Pa. June 26, 2015); Berardino v. Prestige Mgmt. Servs., 2:14-cv-3451, 2017 U.S. Dist. LEXIS 229510 (D.N.J. Dec. 8, 2017); and Higgenbotham v. City of Trenton, 17-cv-4344, 2018 U.S. Dist. LEXIS 234890; 2018 WL 10483122 (D.N.J. Aug. 14, 2018). All of these decisions applied a heightened standard of proof in determining whether the discovery of settlement agreements and other documents should be allowed. That same analysis and result applies here. As noted, the Special Master has reviewed the settlement agreement in camera. Without revealing the contents of the agreement, the Special Master will merely say that there is nothing remarkable contained within it and it is devoid of any provisions likely to shed light on any claims or defenses relevant to this litigation or on potential witness bias or prejudice. In summary, Plaintiffs have failed to meet their burden of demonstrating a heightened or particularized need for the settlement agreement and nothing in the agreement, in fact, necessitates that its contents be revealed. Accordingly, for these reasons, Plaintiffs’ request that Zions provide a copy of its settlement agreement with Prime is DENIED. Footnotes [1] The Special Master also notes that this is not the first time an issue of this nature has arisen in this litigation. In an Order and Opinion filed on February 6, 2023, the Court denied defendant Mercato's motion to compel Plaintiffs to produce documents and communications concerning settlement negotiations with the individual defendants. Plaintiffs had voluntarily produced cooperation agreements with the individual defendants. Plaintiffs’ decision to do so, however, has no bearing on Zions’ position to refrain from producing its agreement with Prime. [ECF 456].