Case 1:17-cv-00868-CFC-SRF Document 209 Filed 06/16/20 Page 1 of 14 PageID #: 7515
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`UNIVERSITY OF
`MASSACHUSETTS and CARMEL
`LABORATORIES, LLC,
`
`Plaintiffs,
`
`v.
`
`L’ORÉAL USA, INC.,
`
`Defendant.
`
`C.A. No. 17-cv-868-CFC-SRF
`
`PLAINTIFFS’ RESPONSE TO DEFENDANT L’OREAL USA, INC.’S
`OBJECTIONS TO MAGISTRATE JUDGE’S APRIL 24, 2020 ORDER
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`I.
`
`INTRODUCTION
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`After months of failed meet and confers, on April 24, Magistrate Judge Fallon
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`ordered L’Oréal to produce all documents it had provided to the FTC during a 2014
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`investigation, by May 8. See Ex. 1 at 113:1-14. L’Oréal did not do so. Instead,
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`L’Oréal produced only a subset of these documents—just the letters and other
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`attorney-drafted communications exchanged between L’Oréal and the FTC.
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`Nothing in L’Oréal’s latest brief on this issue demonstrates that Magistrate
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`Judge Fallon’s decision was “clearly erroneous or contrary to law.” Fed. R. Civ. P.
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`72(a). To begin with, the bulk of L’Oréal’s arguments involve issues not raised
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`before Magistrate Judge Fallon, and thus are plainly improper grounds for objection.
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`1
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`
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`UNIVERSITY OF
`MASSACHUSETTS and CARMEL
`LABORATORIES, LLC,
`
`Plaintiffs,
`
`v.
`
`L’ORÉAL USA, INC.,
`
`Defendant.
`
`C.A. No. 17-cv-868-CFC-SRF
`
`PLAINTIFFS’ RESPONSE TO DEFENDANT L’OREAL USA, INC.’S
`OBJECTIONS TO MAGISTRATE JUDGE’S APRIL 24, 2020 ORDER
`
`I.
`
`INTRODUCTION
`
`After months of failed meet and confers, on April 24, Magistrate Judge Fallon
`
`ordered L’Oréal to produce all documents it had provided to the FTC during a 2014
`
`investigation, by May 8. See Ex. 1 at 113:1-14. L’Oréal did not do so. Instead,
`
`L’Oréal produced only a subset of these documents—just the letters and other
`
`attorney-drafted communications exchanged between L’Oréal and the FTC.
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`Nothing in L’Oréal’s latest brief on this issue demonstrates that Magistrate
`
`Judge Fallon’s decision was “clearly erroneous or contrary to law.” Fed. R. Civ. P.
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`72(a). To begin with, the bulk of L’Oréal’s arguments involve issues not raised
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`before Magistrate Judge Fallon, and thus are plainly improper grounds for objection.
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`1
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`Case 1:17-cv-00868-CFC-SRF Document 209 Filed 06/16/20 Page 2 of 14 PageID #: 7516
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`See Bukovinsky v. Pennsylvania, 455 F. App’x 163, 165–66 (3d Cir. 2011) (“Issues
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`raised for the first time in objections to the magistrate judge’s recommendation are
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`deemed waived.”) (quotations and alterations omitted); see also Jordan v. Mirra,
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`No. CV 14-1485, 2019 WL 2121346, at *1 (D. Del. May 15, 2019) (citing District
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`of Delaware Standing Order for Objections Filed Under Fed. R. Civ. P.72, ¶ 5).
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`Even if considered, L’Oréal’s arguments fail. Lacking any real complaint,
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`L’Oréal instead makes new arguments that these documents do not fall within the
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`scope of Plaintiffs’ formal document request, or that Magistrate Judge Fallon
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`misunderstood the request. Not so. This dispute is about the 7,000 documents that
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`L’Oreal actually turned over to the FTC (the “source” documents). These documents
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`were requested by Plaintiffs in a written discovery request. “Based on her familiarity
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`with this case,” Magistrate Judge Fallon ordered L’Oréal to produce them. Minerva
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`Surgical, Inc. v. Hologic, Inc., No. CV 18-00217-JFB-SRF, 2019 WL 5092254, at
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`*3 (D. Del. Oct. 11, 2019). Indeed, L’Oréal’s source documents—including whether
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`they were cumulative of what L’Oréal already provided Plaintiffs—were a focus of
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`prior hearings.
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`There is no support for L’Oréal’s claim that it is somehow too late for this
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`issue. To the contrary, the record paints a very different picture—namely, that
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`L’Oréal has routinely dragged its feet and shirked its discovery obligations, despite
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`Plaintiffs having sought these documents for months. As Magistrate Judge Fallon
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`2
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`Case 1:17-cv-00868-CFC-SRF Document 209 Filed 06/16/20 Page 3 of 14 PageID #: 7517
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`said at the hearing granting Plaintiffs’ request, L’Oréal is “talking out of both sides
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`of [its] mouth.” Ex. 2 at 101:7-102:8. If any prejudice exists, it is the prejudice
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`Plaintiffs will suffer by having to take depositions against a fact discovery deadline
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`without the time to review these documents.
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`Magistrate Judge Fallon correctly decided this issue. L’Oréal did not even
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`raise the issues it now complains about, the decision was not clearly erroneous or
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`contrary to law, and it should stand.
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`II. BACKGROUND
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`The asserted patents relate to using adenosine for anti-aging skincare. Around
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`2014, the FTC alleged that L’Oréal misled the public with respect to its claims about
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`anti-aging aspects of its products, including certain Accused Products. That
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`investigation appears to have concluded with an order that L’Oréal support anti-
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`aging claims with “competent and reliable scientific evidence.” D.I. 103, Ex. J. It is
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`difficult to imagine more relevant documents than what L’Oréal provided the FTC
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`in an investigation about what “competent and reliable scientific evidence” exists
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`with respect to the anti-aging benefits of Accused Products.
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`Plaintiffs repeatedly asked for these documents, and L’Oréal objected,
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`claiming, without detail, they have “nothing to do with this case,” and—in an
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`obvious contradiction—that they are “duplicative and cumulative” of what L’Oréal
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`already produced to Plaintiffs. D.I. 105 at 4; see also D.I. 124 at 2-3 (same).
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`3
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`Case 1:17-cv-00868-CFC-SRF Document 209 Filed 06/16/20 Page 4 of 14 PageID #: 7518
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`This issue was presented to Magistrate Judge Fallon twice before she issued
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`her April 24 ruling. Plaintiffs’ initial request—which included any government
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`investigations—was denied as overbroad. See D.I. 148, Ex. 4 at 78:5-19 (“THE
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`COURT: . . . I find the request for all documents from all government entities or
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`agencies overbroad . . .”) (emphasis added). Despite L’Oréal now claiming that
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`Plaintiffs “expanded” their request, L’Oréal previously said the opposite,
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`complaining that “this request seeks all documents produced in any litigation or
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`government investigation for any of the over 150 accused products in this case.” Id.
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`at 75:11-13 (emphasis added).
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`On the basis of that representation, Magistrate Judge Fallon denied the request
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`without prejudice to Plaintiffs limiting it. Plaintiffs’ revised request—which was
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`limited to the single 2014 FTC investigation described above—was granted as
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`narrowed. See Ex. 1 at 113:1-14 (“THE COURT: On this request, I will grant
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`plaintiffs’ request to compel production of documents responsive to requests for
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`production number 65 limited to the single 2014 FTC investigation cited by the
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`plaintiff in their letter brief, including the internal and external communications
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`regarding the specific FTC investigation.”).
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`Immediately after that ruling, L’Oréal began backtracking, asking Magistrate
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`Judge Fallon to undo her clear ruling on the basis of new burden and privilege
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`arguments that L’Oréal did not bother to investigate or disclose in the five months
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`4
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`Case 1:17-cv-00868-CFC-SRF Document 209 Filed 06/16/20 Page 5 of 14 PageID #: 7519
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`the parties had been litigating this issue, which included two rounds of briefing to
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`the Court and multiple meet and confers. Magistrate Judge Fallon properly denied
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`that request. See Ex. 3 at 21:21-23:2; see also Local Rule 7.1.5(b) (“Motions for
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`reargument on a ruling made by a Magistrate Judge pursuant to Fed. R. Civ. P. 72
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`are not permitted.”). At the parties’ recent May 18 hearing Magistrate Judge Fallon
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`also questioned L’Oréal as to why it was raising new arguments. See id. at 6:3-8
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`(“THE COURT: . . . I do wish to hear from defendants with respect to those
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`particular items that were listed in my oral order on May 7th and why that
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`information was not gathered and provided to the Court in anticipation of the
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`previous discovery conference on April 24th) (emphasis added).
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`III. ARGUMENT
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`A magistrate judge’s order is “contrary to law only where the magistrate judge
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`has misinterpreted or misapplied the applicable law.” Align Tech., Inc. v. 3Shape
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`A/S, No. CV 17-1646-LPS, 2020 WL 1873026, at *1 (D. Del. Apr. 15, 2020)
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`(citations and quotations omitted). Factual findings are “clearly erroneous” where
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`the Court is “left with the definite and firm conviction that a mistake has been
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`committed.” Id. (quoting Green v. Fornario, 486 F.3d 100, 104 (3d Cir. 2007)). “The
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`district court must accept the ultimate factual determination” of a magistrate “unless
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`that determination either (1) is completely devoid of minimum evidentiary support
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`displaying some hue of credibility, or (2) bears no rational relationship to the
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`5
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`Case 1:17-cv-00868-CFC-SRF Document 209 Filed 06/16/20 Page 6 of 14 PageID #: 7520
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`supportive evidentiary data.” Minerva, 2019 WL 5092254 at *2 (quoting Giles v.
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`Kearney, 571 F.3d 318, 322 (3d Cir. 2009)). Issues not raised before the magistrate
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`are waived. See Bukovinsky, 455 F. App’x at 165–66; Jordan, 2019 WL 2121346;
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`District of Delaware Standing Order for Objections Filed Under Fed. R. Civ. P.72,
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`¶ 5.
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`L’Oréal objects to producing the “over 7,000” documents it produced to the
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`FTC on the grounds that the documents are irrelevant and cumulative, and it would
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`be burdensome for L’Oréal to produce them because they are purportedly
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`“privileged” or “confidential.” Those arguments were either considered and properly
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`rejected by Magistrate Judge Fallon, or never raised below, and therefore waived.
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`Even if this Court were to consider L’Oréal’s new arguments, they are irrelevant and
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`unconvincing. Magistrate Judge Fallon applied the correct legal standard, and, based
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`on the arguments L’Oréal chose to make before her, she determined that the
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`documents L’Oréal objects to producing are relevant, and its burden proportional.
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`That decision was reasoned and practical. L’Oréal’s disagreement does not make the
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`decision “contrary to law.” The decision should stand.
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`A.
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` L’Oréal’s Arguments Were Properly Rejected Below
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`The FTC investigation focused on anti-aging claims L’Oréal made about
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`several of the products Plaintiffs accuse as using the anti-aging technology of the
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`asserted patents. Below, L’Oréal argued—without any details whatsoever—that
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`6
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`Case 1:17-cv-00868-CFC-SRF Document 209 Filed 06/16/20 Page 7 of 14 PageID #: 7521
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`these documents are irrelevant, duplicative of the documents it already produced to
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`Plaintiffs, and, for previously unspecified reasons, too burdensome to produce.
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`Magistrate Judge Fallon’s determination that documents related to this
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`investigation are relevant, non-cumulative, and proportional was rational and
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`supported by the record. Indeed, L’Oréal’s cumulativeness argument cannot even
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`square with its relevance argument. The requested documents cannot be cumulative
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`for the simple fact that where L’Oréal has produced to Plaintiffs just over 3,000
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`documents, a shockingly small production given the approximately 150 anti-aging
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`Accused Products across 18 L’Oréal brands, it produced to the FTC over 7,000
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`documents, apparently related to the anti-aging properties of products limited to just
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`two L’Oréal brands. Moreover, Plaintiffs do not appear to have received all the
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`adenosine studies produced to the FTC. See infra n.1. There is no burden, because
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`L’Oréal’s counsel has already represented that “[w]ith respect to the [documents
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`produced to the FTC], we got those on Wednesday [May 13, 2020] from L’Oréal’s
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`prior lawyers and we have them in our electronic database[.]” Ex. 3 at 19:7-11.
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`L’Oréal could simply turn over those already collected and loaded documents to
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`Plaintiffs, likely in one business day.
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`In sum, Magistrate Judge Fallon heard and reasonably rejected these
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`arguments.
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`B.
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`L’Oréal’s New Arguments Were Waived
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`7
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`Case 1:17-cv-00868-CFC-SRF Document 209 Filed 06/16/20 Page 8 of 14 PageID #: 7522
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`L’Oréal now makes several new arguments in support of its objections. Those
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`arguments should be rejected as both waived, see, e.g., District of Delaware Standing
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`Order for Objections Filed Under Fed. R. Civ. P.72, ¶ 5, and unpersuasive.
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`First, L’Oréal argues for the first time that the documents it provided to the
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`FTC are irrelevant because its “White Paper submitted to the FTC during the
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`Investigation summarizing its claims substantiation does not even include the word
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`‘adenosine.’” D.I. 151 at 9. L’Oréal never raised this particular argument below, and
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`admits so candidly. See D.I. 151-3 ¶ 1. L’Oréal claims good cause exists for this
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`failure because “counsel for L’Oréal USA had not received and reviewed any
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`potentially responsive documents at the time of Order [sic].” Id. But L’Oréal’s
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`failure to investigate is not good cause for raising a new argument, particularly not
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`for documents Plaintiffs requested five months ago, and which L’Oréal felt
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`comfortable representing to the Court—in two written submissions—were somehow
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`both irrelevant and cumulative. See D.I. 105 at 4; D.I. 124 at 2-3. It is now apparent
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`L’Oréal had not even reviewed the documents before making those representations.
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`Even if the Court considers this argument, it fails. The subset of FTC
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`documents L’Oréal did produce on May 8 demonstrate that the FTC requested
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`8
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`Case 1:17-cv-00868-CFC-SRF Document 209 Filed 06/16/20 Page 9 of 14 PageID #: 7523
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`L’Oréal’s adenosine studies. See Ex. 4 at 3.1 Moreover, even materials that do not
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`mention adenosine show testing of the product itself that improves the skin.
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`Second, L’Oréal argues that, before production to Plaintiffs, it would need to
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`“go through its entire [7,000-document] production file to the FTC” to ensure it does
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`not “contain privileged documents” or documents that must be withheld from
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`production for “confidentiality reasons,” D.I. 151 at 3. But L’Oréal never raised
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`these privilege, confidentiality, or volume arguments below, and they are waived.
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`See Ex. 3 at 7:13-19 (“[T]his representation that the enforcement of the Court’s April
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`24th order would require the production of over 7,000 source documents was never
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`raised prior to the April 24th teleconference . . . .”) (emphasis added).
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`In any event, L’Oréal waived privilege over documents it provided to the FTC.
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`See, e.g., Westinghouse Elec. Corp. v. Republic of Philippines, 951 F.2d 1414 (3d
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`Cir. 1991) (rejecting government investigation privilege). L’Oréal’s new argument
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`that the FTC’s grant of FOIA confidential status prevents Plaintiffs, who have also
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`agreed to keep L’Oréal’s documents confidential, see D.I. 48 (stipulated protective
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`order), from receiving these documents, is puzzling at best, and has no basis in law.
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`Third, L’Oréal argues Plaintiffs’ request should be denied because it was
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`improperly “expanded” and not actually before Magistrate Judge Fallon for decision.
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`1 Plaintiffs have searched L’Oréal’s productions for this particular adenosine study,
`including by using the quotations from it in the FTC’s email to L’Oréal, and the
`study does not appear to have been produced to Plaintiffs.
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`9
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`Case 1:17-cv-00868-CFC-SRF Document 209 Filed 06/16/20 Page 10 of 14 PageID #: 7524
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`This argument was never raised below. See D.I. 151-3 ¶ 2. L’Oréal justifies its new
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`argument by saying that Plaintiffs’ request for internal communications produced to
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`the FTC was somehow “not apparent until after the Magistrate Judge’s Order was
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`issued,” D.I. 151-3 ¶ 2, and “based on a misunderstanding” by Magistrate Judge
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`Fallon, D.I. 151 at 8. At its core, the issue here is whether Magistrate Judge Fallon
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`knowingly ordered L’Oréal to produce all documents provided to the FTC, versus
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`just attorney-drafted letters and the like.
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`Magistrate Judge Fallon has already explained that she fully understood
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`Plaintiffs’ request, which was properly before her and clearly raised when “that
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`request was made on the letter brief filed on April 21, three days before the Court’s
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`April 24th, teleconference.” Ex. 3 at 7:3-12. It is simply incorrect that this issue only
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`arose at the hearing. Indeed, Plaintiffs raised this issue on numerous occasions prior
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`to any written submissions to the Court. See, e.g., Ex. 5 at 5. Moreover, L’Oréal
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`provides no explanation for why it could not have raised this point at the hearing
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`itself. L’Oréal understood that Plaintiffs’ request encompassed “representations”
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`about “the underlying science behind the products.” Ex. 1 at 112:9-10.
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`L’Oréal also insists, for the first time, that internal communications it
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`provided to the FTC are not within the scope of Plaintiffs’ formal written requests.
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`Not so. The written request sought “[a]ll documents produced, in any litigation or
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`investigation, to any government entity or agency that refer or relate to the Accused
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`10
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`Case 1:17-cv-00868-CFC-SRF Document 209 Filed 06/16/20 Page 11 of 14 PageID #: 7525
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`Products.” D.I. 151 Ex. B (RFP No. 65). Magistrate Judge Fallon likewise ordered
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`the production of documents “responsive to requests for production number 65,
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`limited to the single 2014 FTC investigation.” Ex. 1 at 113:1-14. To the extent there
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`was any confusion as to whether this included both attorney-drafted documents, and
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`L’Oréal’s internal source material, Magistrate Judge Fallon explained her order
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`included “the internal and external” communications. Id. Pursuant to that order, in
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`response to a written request served in approximately December 2019, L’Oréal must
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`produce the “over 7,000” documents provided to the FTC, including internal
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`communications provided to the FTC. See Ex. 4 at 3 (the FTC received emails from
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`L’Oréal). There is nothing new or “expanded” about the request.
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`IV. CONCLUSION
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`Plaintiffs request the Court deny L’Oréal’s objections and order it to produce
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`all documents it provided to the FTC pursuant to the relevant 2014 investigation.
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`Plaintiffs request the production of these already collected and loaded documents
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`within one business day. The end of fact discovery is quickly approaching, and
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`Plaintiffs need these documents to prosecute their case.
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`Dated: May 22, 2020
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`Respectfully submitted,
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`FARNAN LLP
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`
`
`/s/ Brian E. Farnan
`Brian E. Farnan (Bar No. 4089)
`Michael J. Farnan (Bar No. 5165)
`919 North Market Street, 12th Floor
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`11
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`Case 1:17-cv-00868-CFC-SRF Document 209 Filed 06/16/20 Page 12 of 14 PageID #: 7526
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`Of Counsel:
`William Christopher Carmody
`Tamar E. Lusztig
`Beatrice C. Franklin
`SUSMAN GODFREY L.L.P.
`1301 Avenue of the Americas, 32nd Floor
`New York, NY 10019
`Telephone: (212) 336-8330
`Facsimile: (212) 336-8340
`bcarmody@susmangodfrey.com
`tlusztig@susmangodfrey.com
`bfranklin@susmangodfrey.com
`
`Justin A. Nelson
`SUSMAN GODFREY L.L.P.
`1000 Louisiana Street, Suite 5100
`Houston, Texas 77002
`Telephone: (713) 651-9366
`Facsimile: (713) 654-6666
`jnelson@susmangodfrey.com
`
`
`Wilmington, DE 19801
`Telephone: (302) 777-0300
`Facsimile: (302) 777-0301
`bfarnan@farnanlaw.com
`mfarnan@farnanlaw.com
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`
`Attorneys for University of
`Massachusetts and Carmel
`Laboratories, LLC
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`
`Matthew B. Lowrie
`FOLEY & LARDNER LLP
`111 Huntington Avenue, Suite 2600
`Boston, MA 02199
`Telephone: (617) 342-4000
`Facsimile: (617) 342-4001
`mlowrie@foley.com
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`Attorneys for Carmel Laboratories, LLC
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`12
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`Case 1:17-cv-00868-CFC-SRF Document 209 Filed 06/16/20 Page 13 of 14 PageID #: 7527
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`COMMONWEALTH OF MASSACHUSETTS,
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`By its attorney,
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`MAURA HEALEY
`ATTORNEY GENERAL
`
`By: William Christopher Carmody
`William Christopher Carmody
`Special Assistant Attorney General
`SUSMAN GODFREY L.L.P.
`1301 Avenue of the Americas, 32nd Floor
`New York, NY 10019
`Telephone: (212) 336-8330
`Facsimile: (212) 336-8340
`bcarmody@susmangodfrey.com
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`Attorney for University of
`Massachusetts
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`13
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`Case 1:17-cv-00868-CFC-SRF Document 209 Filed 06/16/20 Page 14 of 14 PageID #: 7528
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`CERTIFICATION OF COMPLIANCE
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`The foregoing document complies with the type-volume limitation of the
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`Court’s November 6, 2019 Standing Order. The text of this document was prepared
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`in Times New Roman, 14 point. According to the word processing system used to
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`prepare it, this document contains 2,405 words, excluding tables.
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`
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`Dated: May 22, 2020
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` /s/ Brian E. Farnan .
`Brian E. Farnan (Bar No. 4089)
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`
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