Tuesday, February 20, 2007, 2/20/2007 02:27:00 PM

Federal Court Addresses Eli Lilly's Trade Secrets Identified in Zyprexa Litigation

By Todd
The fascinating opinion issued on February 13th of United States District Court Judge Jack Weinstein granting a permanent injunction begins "This case raises the intriguing questions of when it is appropriate to conduct aspects of civil litigation in secrecy, and of what are appropriate limits on civil disobedience by newspaper reporters, forensic experts, and attorneys."

For over two and a half years, a multidistrict products liability action was pending in Judge Weinstein's court over the Lilly anti-psychotic drug Zyprexa. The plaintiffs alleged that as a result of inadequate warnings by Lilly they became obese and suffered from diabetes. The court ordered internal Lilly documents were to be sealed on consent of the parties so that discovery could be expedited and the cases settled or litigated on their merits. A comprehensive protective order was entered.

Apparently, a New York Times reporter named Alex Berenson worked with the plaintiffs' expert to arrive at a means to avoid the protective order and obtain the protected documents in the expert's possession. Berenson allegedly worked with the expert in identifying an attorney in Alaska who could subpoena the documents from the expert under the pretense of needing them and that attorney would assist in disseminating them to the world. Judge Weinstein opined that rather than seeking a judicial lifting of the protective order, the three "conspirators" (NYT's reporter, plaintiffs' expert, and Alaskan attorney) agreed that the Alaskan attorney would disseminate the documents far and wide and the New York Times reported a number of stories under Berenson's by-line. Needless to say, Lilly reported this matter to Judge Weinstein and he wasn't happy. The Court ordered the Alaskan attorney to retrieve the documents and return them to the court-ordered "Master of Discovery" and report back.

Understandably, those who received the documents from the Alaskan attorney were not all equally prepared to give them back or even give them up. Hearing about that, Judge Weinstein issued a preliminary injunction prohibiting individuals and organizations from further disseminating them or the information. Interestingly, Judge Weinstein did not enjoin the New York Times in this regard - although it appears that Lilly did not seek the injunction to reach that newspaper. As Judge Weinstein makes clear in his opinion "no newspaper or website is directed to do anything or to refrain from doing anything" to comply with the injunction.

The plaintiffs' expert gets pilloried by Judge Weinstein in this opinion - mainly because he was a signatory to an agreement NOT to distribute documents sealed by court order. Judge Weinstein notes "such unprincipled revelation of sealed documents seriously compromises the ability of litigants to speak and reveal information candidly to each other; these illegalities impede private and peaceful resolution of disputes." Judge Weinstein goes on to address the New York Times in a similarly harsh fashion, noting the illegal scheme to obtain the information being dissimilar to the "Pentagon Papers" matter in that the documents in the Lilly matter were illegally obtained as the product of a conspiracy to evade a federal court order.

The court granted the permanent injunction sought (e.g., preventing further dissemination of the documents) but did not include any prohibition on websites that had posted or linked to the Lilly documents.

This opinion is a fascinating read. The case can be cited as In re Zyprexa Injunction, 2007 WL 460838 (February 13, 2007 E.D.N.Y.). There will likely be appeals taken from the permanent injunction and we'll report back on these as they develop.

Here's Eli Lilly's press release regarding Judge Weinstein's decision: http://newsroom.lilly.com/ReleaseDetail.cfm?ReleaseID=229954

Here's The Washington Post's write-up of Judge Weinstein's decision:

Here's the Electronic Frontier Foundation's fact-filled website page concerning the matter:

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