With a scheduled trial a month away, the lawyers leading Brigham Young University’s six-year-old breach of contract and intellectual property suit against Pfizer lost a motion Monday to heap further sanctions on the drug maker for allegedly stonewalling during discovery.
The dispute is a small skirmish in a multibillion-dollar battle that’s already left plenty of scars on Pfizer’s outside lawyers. BYU alleges that it’s owed at least $9.25 billion in compensation for contributions made by a biochemistry professor, Daniel Simmons, to the development of the blockbuster drug Celebrex. According to BYU, Pfizer has sold $33 billion worth of the drug.
Back in 2009, Salt Lake City federal magistrate judge Brooke Wells fined Pfizer, which was then represented by Sidley Austin, nearly $900,000 for repeatedly dragging its feet and pushing back against BYU’s discovery requests. The judge stopped short of concluding that Pfizer had acted in bad faith, but she warned that she might change her mind if the problems continued. BYU claimed in its earlier sanctions motion that each day of discovery delay cost it $10 million in potential royalties.
For its latest sanctions bid, BYU claimed that Pfizer failed to preserve documents, managed its records inappropriately, and ignored the court’s discovery orders. In her decision on Monday, Wells refused to issue sanctions or agree to a jury instruction of spoliation, finding that “while Pfizer’s conduct during discovery has not always been commendable,” it hadn’t willfully obstructed discovery.
BYU and Simmons are represented by name partner Leo Beus of Salt Lake City-based Beus Gilbert. Pfizer’s defense lineup includes John Dougherty and Richard Mulloy of DLA Piper and William Lee of Wilmer Cutler Pickering Hale and Dorr. Neither Beus nor Dougherty responded to requests for comment.
The complaint, filed in 2006, claims that Simmons isolated a key enzyme and then signed an agreement with Monsanto in 1991 to jointly develop it into a commercial anti-inflammatory drug. The plaintiffs claim that Monsanto’s pharma unit, which was later acquired by Pfizer, breached the agreement by backing out of the deal then developing and marketing Celebrex on its own. Plaintiffs claim they tried for years to work out a settlement with Pfizer before suing the company.
Pfizer claims that it met all of its obligations under the contract with BYU and Simmons.
Presiding judge Ted Stewart ruled on a series of partial summary judgment motions over the past month, permitting most of the university’s major claims to go to a jury. In one key ruling for BYU, he agreed to allow the jury to hear evidence that Simmons should be listed as a co-inventor on patents that Pfizer obtained in developing Celebrex.
There’s been near constant upheaval in the case for Pfizer’s legal team. The company’s original Sidley Austin lawyers, including Charles Douglas, were terminated about a year after the company was hit with sanctions in 2009. Pfizer tapped co-counsel DLA and Winston & Strawn’s Dan Webb in February 2010, but Winston withdrew in November 2010 after the firm was disqualified over an alleged a conflict of interest. (Read the National Law Journal’s report here.) At the time, the magistrate judge ruled that Winston had appeared to “abandon” its longstanding client BYU in favor of a more lucrative matter for Pfizer. Allowing the firm and a partner who had represented BYU “to shift all allegiances for the sake of monetary gain in a troubled economy undermines the interests of the parties, the legal profession and the intent of the Rules of Professional Conduct,” that judge wrote in her decision.
With DLA and Wilmer now in the driver’s seat, trial is set for May 29. If it goes forward, it is expected to last six weeks. Judge Stewart appointed a settlement judge and referred the matter to him in March; counsel were told to jointly schedule a settlement conference.
In a recent statement to The Salt Lake Tribune, a Pfizer spokesman said the company is looking forward to vindication at trial. “While the company is pleased with some of the recent rulings and disappointed by others,” said Christopher Loder, “it remains confident that the evidence at trial will show this lawsuit has no merit.”
This article originally appeared in The Am Law Litigation Daily.
