State ex rel. Rutledge v. Purdue Pharma L.P.

2021 Ark. 133

624 S.W.3d 106

STATE of Arkansas EX REL. Leslie RUTLEDGE, Attorney General, Appellant

v.PURDUE PHARMA L.P. ; Purdue Pharma, Inc. ; the Purdue Frederick Company, Inc. ; Johnson & Johnson ; Janssen Pharmaceutica, Inc., n/k/a Janssen Pharmaceuticals, Inc.; Ortho-McNeil-Janssen Pharmaceuticals, Inc., n/k/a Janssen Pharmaceuticals, Inc.; Endo Health Solutions, Inc. ; Endo Pharmaceuticals, Inc. ; and Does 1 Through 100, Inclusive, Appellees

No. CV-20-682

Supreme Court of Arkansas.

Opinion Delivered: June 10, 2021

Leslie Rutledge, Att'y Gen., by: Charles J. Harder, Deputy Att'y Gen.; Dover Dixon Horne, PLLC, Little Rock, by: Gary B. Rogers and Michael G. Smith ; and Baron & Budd, PC, by: Jennifer Fountain Connolly and Michael von Klemperer, pro hac vice, for appellant.

Arnold & Porter Kaye Scholer LLLP, by: Anthony J. Franze, pro hac vice; and Kutak Rock LLP, Little Rock, by: Jess Askew III and Andrew King, for separate appellees Endo Pharmaceuticals, Inc., and Endo Health Solutions, Inc.; and O'Melveny & Myers LLP, by: Amy J. Laurendeau, pro hac vice; and Friday Eldredge & Clark LLP, Little Rock, by: James M. Simpson and Martin A. Kasten, for separate appellees Janssen Pharmaceuticals, Inc.; Janssen Pharmaceutica, Inc., n/k/a Janssen Pharmaceuticals, Inc.; Ortho-McNeil-Janssen Pharmaceuticals, Inc., n/k/a Janssen Pharmaceuticals, Inc.; and Johnson & Johnson.

SHAWN A. WOMACK, Associate Justice

The State of Arkansas brings this interlocutory appeal challenging a sanctions order entered by the Pulaski County Circuit Court pursuant to Rule 37 of the Arkansas Rules of Civil Procedure. For reversal, the State argues the circuit court's order sanctioning the State for failing to comply with its discovery rulings violates both the Arkansas Constitution and the Arkansas Rules of Civil Procedure. Because we lack appellate jurisdiction over this appeal, we dismiss.

I. Facts and Procedural Background

On March 29, 2018, Leslie Rutledge, acting in her capacity as Arkansas Attorney General, brought this action in the name of the State of Arkansas against defendants Johnson & Johnson; Janssen Pharmaceuticals, Inc.; Ortho-McNeil-Janssen Pharmaceuticals, Inc. n/k/a Janssen Pharmaceuticals, Inc.; Janssen Pharmaceutica, Inc., n/k/a Janssen Pharmaceuticals, Inc. (together, "Janssen"); and Endo Health Solutions Inc. and Endo Pharmaceuticals, Inc. (together, "Endo") (collectively, "defendants"), in connection with defendants’ role in the ongoing opioid epidemic.¹ The State alleged that several state entities, including the Department of Health, Department of Human Services, Department of Corrections, Division of State Police, and the state court system, incurred enormous costs combating the opioid crisis and that such costs were "massive, direct, [and] quantifiable." The State further alleged that abating the opioid crisis would require an expanded outlay of the State's resources.

The State asserted five causes of actions against defendants: (1) violations of the Arkansas Deceptive Trade Practices Act, Ark. Code Ann. §§ 4-88-101 et seq. (Repl. 2011 & Supp. 2019); (2) violations of the Arkansas Medicaid Fraud False Claims Act, Ark. Code Ann. §§ 20-77-901 et seq. (Repl. 2016 & Supp. 2019); (3) creation of a public nuisance; (4) unjust enrichment of defendants at the State's expense; and (5) civil conspiracy. The State sought injunctive relief, statutory and common law damages, statutory penalties, pre- and postjudgment interest and fees, punitive and treble damages, abatement, and restitution. Defendants moved to dismiss the State's complaint, which the circuit court denied on April 5, 2019.

Discovery began in May and June 2019, with defendants each filing requests for production of documents and first sets of interrogatories. Endo requested information on "each cost, expenditure, damage, reimbursement, loss, or harm" for which the State sought relief and "the Agency or entity that paid that cost." Janssen made similar requests. The Attorney General opposed defendants’ discovery requests to the extent they sought materials "not in the possession, custody, or control of the Arkansas Attorney General's office," such as documents or information within "state agencies." The Attorney General averred the appropriate avenue for pursuing discovery from other state agencies was by subpoena under Arkansas Rule of Civil Procedure 45.

In a joint filing on August 21, 2019, defendants moved to compel the State to produce documents and information in the possession of the State and its agencies. Defendants asserted the requested materials were central to the case and their ability to defend against the State's allegations. The Attorney General responded in opposition to defendants’ motion to compel, arguing that this action was brought on behalf of the State of Arkansas, not individual state agencies, and that no state agency was named as a party in its complaint. In addition, the Attorney General asserted her office lacks the authority to compel discovery from agencies that report to the Arkansas Governor.

On October 1, 2019, the circuit court granted defendants’ motion to compel in part. The court found that the Attorney General "specifically alleged causation of ‘quantifiable’ damages to several specific State Agencies and Departments" and that "such damages comprising a factual basis for the allegations, were known, or were available and ascertainable, by the Attorney General, at the time of filing." The court rejected the Attorney General's assertion that her office "has no direct obligation to provide discovery responses relative to those agencies and Departments specifically referred to in the Complaint." Accordingly, the court ordered the Attorney General to provide discovery responses from the five agencies referenced in the State's complaint:

As to those Agencies and Departments of State Government referred to in the Complaint, the Motion to Compel is GRANTED and the State of Arkansas, by its Attorney General, is ORDERED and DIRECTED to provide complete and specific non-privileged Responses to the Discovery propounded WITHIN 45 DAYS of the entry of this Order. FAILURE TO PROVIDE FULL DISCLOSURE MAY RESULT IN SANCTIONS under Rule 37 ARCP, including the striking of pleadings or evidence.

Following the circuit court's discovery order, the State filed a notice of its intention to seek damages on behalf of five state agencies: (1) Department of Health, (2) Department of Human Services, (3) Department of Corrections, (4) Division of State Police, and (5) Administrative Office of the Courts. The State further clarified that it sought damages pursuant to its claim under the Medicaid Fraud False Claims Act, Ark. Code Ann. §§ 20-77-901 et seq., and its claim for public nuisance.

On February 3, 2020, defendants filed a joint motion requesting that the circuit court enforce its October 2019 order compelling discovery and employ all appropriate remedies available under Rule 37(b)(2) of the Arkansas Rules of Civil Procedure. Defendants alleged the State's supplemental responses served on November 15 and December 30 failed to satisfy its discovery obligations to provide "complete and specific" responses, including information and documents from the five agencies named in the State's complaint. The Attorney General opposed defendants’ motion, claiming her office had complied with the circuit court's order by serving subpoenas commanding the five state agencies to cooperate in providing responsive discovery and that any such deficiency in an agency's responses was out of the Attorney General's control.

Janssen subsequently served the Attorney General on June 12, 2020, with four sets of requests for production of documents from sixteen state agencies and entities. The Attorney General moved for a protective order, again maintaining that this action was brought on behalf of the State, no state agency is a party, and her office does not have possession, custody, or control of other agencies’ documents. Janssen argued that because the plaintiff is the State of Arkansas, the State necessarily controls the documents of its own agencies, and it is irrelevant what materials the State's counsel––the Attorney General––alone possesses.

On August 12, 2020, following a status hearing, the circuit court entered a written order ruling on the State's motion for protective order and defendants’ motion to enforce, respectively. The court granted the State's request for a protective order "except as to the five (5) state agencies which were the subject of the Court's October 2019 Order." Because the court had "previously found that, for the purpose of discovery, the Plaintiff, Attorney General Rutledge, represents five state agencies to which she initially referred to in her complaint," the court ordered the Attorney General to "facilitate conferences" between those agencies and defendants "in order to determine what computer protocols are best suited to enable the remaining discovery" from those agencies.

Pursuant to the court's August 12 order, the Attorney General arranged conferences between defendants and the four executive agencies.² The Attorney General arranged a conference with the fifth agency, the Administrative Office of the Courts, which declined to confer with defendants.³

On September 3, 2020, the circuit court held another status hearing. Defendants argued the court-ordered conferences did not result in the production of discovery materials sought and requested that the court enforce its discovery orders. The Attorney General maintained that her office had complied with the court's orders. In an order entered on September 15, the circuit court found that the Attorney General had neither "provided ‘complete and specific’ discovery responses" nor "represented that such responses are forthcoming." As such, the court ordered the Attorney General to file an amended complaint that struck "any claim for any form of relief for any alleged harm associated with the five...