throbber
Case 1:20-cv-00393-LO-TCB Document 614 Filed 05/14/21 Page 1 of 15 PageID# 13935
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`ALEXANDRIA DIVISION
`
`RAI STRATEGIC HOLDINGS, INC. and
`R.J. REYNOLDS VAPOR COMPANY,
`
`Plaintiffs and Counterclaim Defendants,
`
`v.
`
`ALTRIA CLIENT SERVICES LLC; PHILIP
`MORRIS USA INC.; and PHILIP MORRIS
`PRODUCTS S.A.,
`
`Defendants and Counterclaim Plaintiffs.
`
`Case No. 1:20-cv-00393-LO-TCB
`
`REDACTED
`FILED UNDER SEAL
`
`R.J. REYNOLDS VAPOR COMPANY’S MEMORANDUM IN SUPPORT OF MOTION TO
`COMPEL DEFENDANT PHILIP MORRIS PRODUCTS S.A. TO DESIGNATE RULE 30(b)(6)
`WITNESSES RELATING TO PHILIP MORRIS PRODUCTS S.A.’S CLAIM FOR A
`PERMANENT INJUNCTION
`
`

`

`Case 1:20-cv-00393-LO-TCB Document 614 Filed 05/14/21 Page 2 of 15 PageID# 13936
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`
`
`TABLE OF CONTENTS
`
`INTRODUCTION........................................................................................................................ 1
`FACTUAL BACKGROUND ...................................................................................................... 2
`LEGAL STANDARD .................................................................................................................. 6
`ARGUMENT ................................................................................................................................ 6
`CONCLUSION .......................................................................................................................... 10
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`Page
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`
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`
`
`-i-
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`

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`Case 1:20-cv-00393-LO-TCB Document 614 Filed 05/14/21 Page 3 of 15 PageID# 13937
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`
`
`
`
`CASES
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`eBay Inc. v. MercExchange, LLC,
`547 U.S. 388 (2006) ......................................................................................................... passim
`
`Loboa v. Women’s Health Alliance, P.A.,
`No. 5:18-cv-329-FL, 2020 WL 889739 (E.D.N.C. Feb. 24, 2020) ...........................................6
`
`NewMarket Corp. v. Innospec Inc.,
`No. 10-cv-503, 2011 WL 1306008 (E.D. Va. Apr. 1, 2011) .....................................................6
`
`OTHER AUTHORITIES
`
`Fed. R. Civ. P. 30(b)(6).......................................................................................................... passim
`
`Fed. R. Civ. P. 37(a)(3)(B) ..............................................................................................................2
`
`Local Civil Rule 37 ......................................................................................................................2, 6
`
`
`
`ii
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`

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`Case 1:20-cv-00393-LO-TCB Document 614 Filed 05/14/21 Page 4 of 15 PageID# 13938
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`
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`INTRODUCTION
`
`In June 2020, Defendant Philip Morris Products S.A. (“PMP”) lodged counterclaims
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`against Plaintiff R.J. Reynolds Vapor Company (“RJRV”), asserting that three of PMP’s patents
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`are infringed by one or more of RJRV’s VUSE line of vaping products. Nearly nine months later,
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`PMP sought and (over RJRV’s objection) was allowed to add a claim for injunctive relief—
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`seeking to exclude the VUSE products completely from the U.S. market. (Dkt. 463, 483.) This is
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`an extraordinary request that,
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`
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` To justify a
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`permanent injunction, PMP bears the burden to prove that: (i) it has suffered irreparable injury,
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`(ii) remedies available at law, such as monetary damages, are inadequate to compensate for that
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`injury, (iii) considering the balance of hardships between PMP and RJRV, a remedy in equity is
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`warranted, and (iv) the public interest would not be disserved by a permanent injunction. See eBay
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`Inc. v. MercExchange, LLC, 547 U.S. 388, 291 (2006). Despite the fact that PMP bears the burden
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`on these issues, however, it has inexplicably refused to produce witnesses to testify about the
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`complete factual bases underlying its injunction claim.
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`Instead, after weeks of effort from RJRV to get complete answers to its simple discovery
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`requests relating to PMP’s new claim, the most PMP will commit to do is produce witnesses to
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`cover certain limited sub-topics of PMP’s own choosing, leaving no one to testify about critical
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`issues like irreparable harm and public interest. For example, and as discussed in more detail
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`below, Topic 68 is a straightforward request asking PMP to designate a witness to testify about its
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`contentions underlying each of the four eBay factors. The relevance of this request is beyond
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`question. Nevertheless, PMP has refused. Rather than put forward a witness to testify about the
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`full scope of its injunction-related claims, PMP insists that it will only offer testimony
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`

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`Case 1:20-cv-00393-LO-TCB Document 614 Filed 05/14/21 Page 5 of 15 PageID# 13939
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`
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` In so doing, PMP has unilaterally redefined the noticed topics into
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`narrow carve-outs that do not cover the full scope of the eBay factors PMP must prove, nor the
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`full scope of issues laid out in PMP’s own interrogatory answers.
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`PMP’s position is indefensible. Having asserted this claim, PMP must allow discovery of
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`it, including by making witnesses available so that RJRV can test PMP’s assertions and secure
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`testimony that will be binding on PMP as a company. For the reasons discussed further below,
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`and pursuant to Fed. R. Civ. P. 37(a)(3)(B) and Local Civil Rule 37, RJRV respectfully requests
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`that this Court enter an Order compelling PMP to designate one or more witnesses to testify
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`regarding the complete subject matter described in Topic Nos. 68-70, 72, 76, and 83 from
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`Plaintiffs’ Second Notice of Rule 30(b)(6) Deposition of PMP.
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`FACTUAL BACKGROUND
`
`RJRV served its Rule 30(b)(6) notice to PMP on April 7, 2021, and included specific
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`requests for one or more witnesses to testify on behalf of PMP about topics (numbered 68-83)
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`relating to its request for injunctive relief. (Ex. 1 [Apr. 7, 2021, RJRV’s 30(b)(6) Notice].) The
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`topics in dispute are shown in the chart below:
`
`Topic 68
`
`Topic 69
`
`
`
`The factual bases underlying PMP’s contention, including PMP’s response
`to Interrogatory Nos. 23–24, that (i) PMP has suffered irreparable injury,
`(ii) remedies available at law, such as monetary damages, are inadequate to
`compensate for that injury, (iii) considering the balance of hardships
`between PMP and Reynolds, a remedy in equity is warranted, and (iv) the
`public interest would be properly served by a permanent injunction.
`
`Each fact that PMP alleges supports PMP’s request for a permanent
`injunction and that was not present and/or known to PMP on or before June
`29, 2020, including when each such fact became known to PMP.
`
`
`2
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`

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`Case 1:20-cv-00393-LO-TCB Document 614 Filed 05/14/21 Page 6 of 15 PageID# 13940
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`
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`Topic 70
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`Topic 72
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`Topic 76
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`Topic 83
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`Any and all harms or injury PMP alleges PMP has suffered or will suffer
`from Reynolds’s alleged infringement, absent entry of an injunction.
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`All equitable considerations applicable to PMP’s request for injunctive relief.
`
`The drivers of demand for the Reynolds Accused Products.
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`PMP’s contentions regarding whether and to what extent Reynolds would
`suffer any hardships if the Reynolds Accused Products were enjoined.
`
`(Ex. 1 [Apr. 7, 2021, RJRV’s 30(b)(6) Notice] at 5-9, 14, 16, and 21.)
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`On April 21, PMP responded that it (i) would provide witnesses to testify on the full scope
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`of Topic Nos. 68 and 70, as well as certain other topics that are not at issue in this motion; and (ii)
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`it would not produce a witness for the remaining topics in the chart above. (Ex. 2 [Apr. 21, 2021,
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`PMP’s Response to RJRV’s 30(b)(6) Notice] at 6-22.) Also on April 21, PMP designated
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` as to certain topics, but not 68 or 70. (Ex. 3 [Apr. 21, 2021, Koh Email to
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`Smith] at 1.)
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`Within hours of receiving that response, RJRV asked PMP who it was designating for
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`Topic No. 68, considering that it is the broad topic speaking to the factual bases for PMP’s claims
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`as to each of the eBay factors, and essentially is the anchor for all of RJRV’s other, more specific
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`requests. Having received no reply, on April 22, RJRV asked PMP again to “confirm who the
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`witnesses will be on Topics 68 and 70” and to confirm that PMP would designate witnesses on the
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`remaining topics. (Ex. 4 [Apr. 22, 2021, Smith Letter to Koh] at 1-2.)
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` was the only person that PMP had identified, by email, in response to RJRV’s
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`interrogatory seeking the identities of the 3 persons most knowledgeable about the factual bases
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`for the injunction claim (and even that identification only came after RJRV pushed back on PMP’s
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`initial position that, because the propriety of injunctive relief is a matter of law, it was not required
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`to identify any fact witnesses at all). Having named
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` as the only person with factual
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`3
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`

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`Case 1:20-cv-00393-LO-TCB Document 614 Filed 05/14/21 Page 7 of 15 PageID# 13941
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`knowledge of its contentions, RJRV questioned why she was not designated by PMP as the Rule
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`30(b)(6) witness on the remaining injunction-related topics, including 68. (Ex. 5 [Apr. 23, 2021,
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`Michalik Letter to Koh] at 2.)
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`In response, PMP designated
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` for Topic Nos. 68, 70, and 72. Although PMP
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`had agreed in its April 21 formal response to the deposition notice to provide one or more
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`witnesses to testify to the complete scope of Topic 68, PMP changed its position. PMP unilaterally
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`elected to designate
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` solely
`
`
`
`
`
` phrases that appear nowhere in RJRV’s deposition notice. Similarly, PMP designated
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` for Topics 70 and 72, but again only
`
`
`
`
`
` (Ex. 6 [Apr. 23, 2021, Koh Email to Smith] at 1.)
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`On April 26, RJRV asked PMP to provide designees for outstanding 30(b)(6) topics,
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`including the remaining scope of Topic Nos. 68, 70, and 72 that the limited scope of testimony
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`offered from
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` did not cover, and Topic Nos. 69, 76, 78, and 83. (Ex. 7 [Apr. 26, 2021,
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`Smith Email to Koh] at 1.) In response, PMP designated
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` as to Topic Nos. 68, 70, and
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`72, but again only as to limited subjects of PMP’s unilateral choosing. Specifically,
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`offered solely
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` was
`
`
`
` (Ex. 8 [May 4,
`
`2021, Koh Letter to Michalik] at 1-2.)
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`RJRV wrote to PMP on May 10 to ask—again—that PMP “designate the witness or
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`witnesses who will testify regarding the factual bases for PMP’s claim for injunctive relief.” (Ex.
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`9 [May 10, 2021, Smith Letter to Koh] at 1.) At a minimum, RJRV asked that PMP “confirm
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`
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`4
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`

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`Case 1:20-cv-00393-LO-TCB Document 614 Filed 05/14/21 Page 8 of 15 PageID# 13942
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`whether [PMP] intend[s] to offer additional designees to speak for the full scope of Topics 68, 70,
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`and 72, beyond the sub-topics [PMP] . . . unilaterally chose[] for
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`” or,
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`in the alternative, “confirm that [PMP] will not do so, and that PMP thus does not intend to offer
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`any factual evidence or testimony on the eBay factors beyond the limited areas to be addressed by
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`.” (Id. at 2.) Additionally, RJRV requested that PMP designate
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`witnesses on Topic Nos. 69, 76, 78, and 83. (Id.) RJRV followed up on these issues again by
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`letter on May 12, 2021. (Ex. 10 [May 12, 2021, Michalik Letter to Koh].)
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`With no further movement from PMP, the parties had a meet and confer on May 13, 2021
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`to discuss these issues. RJRV sought a definitive position from PMP as to whether it was truly
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`limiting its response to the Rule 30(b)(6) topics, including Topic 68, to just the narrow subjects
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`offered for
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`, or whether additional designations were forthcoming as to
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`the full scope of Topic 68 and as to the remaining topics. In terms of the timing of depositions,
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`both sides agreed that they do not want to present witnesses more than once; thus, the additional
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`documents each side intends to produce in response to injunction-specific requests should be
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`produced in advance of those depositions. RJRV therefore proposed a reasonable, orderly process
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`whereby PMP would complete its production of documents in response to injunction-related
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`requests, and then RJRV could conduct the depositions of PMP’s designees not less than 5 days
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`later, to give RJRV time to review those new materials in advance of the depositions. RJRV
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`offered to follow the same protocol as to its own injunction-related designee, whose deposition
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`would follow those of PMP, and suggested that all of this could be accomplished by early-to-mid
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`June, depending on PMP’s ability to complete its document production. (Ex. 11 [May 13, 2021,
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`Smith Email to Koh].)
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`
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`5
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`

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`Case 1:20-cv-00393-LO-TCB Document 614 Filed 05/14/21 Page 9 of 15 PageID# 13943
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`
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`RJRV made clear that the key to the entire process was for PMP, as the party with the
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`burden of proof, to at last commit to provide witnesses in response to the full scope of RJRV’s
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`Rule 30(b)(6) requests, and to identify the designees. (Id.) RJRV requested that commitment by
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`close of business, or it would consider the parties to be at an impasse. (Id.) Unfortunately, no
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`such confirmation was provided. PMP finally responded to RJRV’s May 10 letter on the evening
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`of May 13 after the close of business, but merely parroted its previous carve outs and objections.
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`(See Ex. 12 [May 13, 2021, Koh Letter to Smith].)
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`Because PMP’s letter failed to resolve the parties’ disputes regarding Topic Nos. 68-70,
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`72, 76, and 83 and because PMP refuses to designate witnesses concerning topics that are
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`obviously relevant to its permanent injunction claim, RJRV has no choice but to seek relief from
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`the Court.
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`LEGAL STANDARD
`
`Federal Rule of Civil Procedure 30(b)(6) requires corporate parties to identify and
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`adequately prepare designees to provide “information known or reasonably available to the
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`organization.” Fed. R. Civ. P. 30(b)(6). A corporate party must make “‘a conscientious, good-
`
`faith effort to designate knowledgeable persons for Rule 30(b)(6) depositions and to prepare them
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`to fully and unevasively answer questions about the designated subject matter.’” Loboa v.
`
`Women’s Health Alliance, P.A., No. 5:18-cv-329-FL, 2020 WL 889739, at *2 (E.D.N.C. Feb. 24,
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`2020) (citations omitted). A Rule 37 motion to compel is appropriate when a corporate party fails
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`to designate a witness under Rule 30(b)(6). See NewMarket Corp. v. Innospec Inc., No. 10-cv-503,
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`2011 WL 1306008, at *6 (E.D. Va. Apr. 1, 2011) (Lauck, J.).
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`ARGUMENT
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`The plain facts illustrate that PMP has fallen short of its responsibility to identify designees
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`to provide “information known or reasonably available to the organization.” Fed. R. Civ. P.
`
`
`
`6
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`

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`Case 1:20-cv-00393-LO-TCB Document 614 Filed 05/14/21 Page 10 of 15 PageID# 13944
`Case 1:20-cv-00393-LO-TCB Document 614 Filed 05/14/21 Page 10 of 15 Page|D# 13944
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`30(b)(6). Despite the nearly seven weeks since RJRV served its first injunction—related Rule
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`30(b)(6) notice, PMP has yet to designate a witness on the remaining (significant) scope of Topic
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`Nos. 68, 70, and 72, and has not designated a witness at all for Topic Nos. 69, 76, and 83.
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`At best, PIVIP’s combined designations for Topic Nos. 68, 70, and 72 in particular, fail to
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`cover the majority of those topics’ scope. PMP’s self—serving carve-outs fail to fully address, at
`
`least, the portion of RJRV’s topics in bolded red font below:
`
`
`
`RJRV’s To n ics
`
`Topic No. 68:
`The factual bases underlying PMP’s contention,
`including PMP’s response to Interrogatory Nos.
`23—24, that (i) PMP has suffered irreparable
`
`injury, (ii) remedies available at law, such as
`
`monetary
`
`damages,
`
`are
`
`inadequate
`
`to
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`compensate for that injury, (iii) considering the
`balance of hardships between PMP and
`Reynolds, a remedy in equity is warranted, and
`(iv)
`the public interest would be properly
`
`served by a permanent injunction.
`
`Topic No. 70:
`Any and all harms or injury PMP alleges PIVIP
`has suffered or will suffer from Reynolds’s alleged
`infringement, absent entry of an injlmction.
`
`PMP’s Carve Outs
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`(same limitations as Topic
`
`
`
`
`
`(same limitations as Topic No.
`
`
`(same limitations as Topic
`
`Topic No. 72
`All equitable considerations applicable to No.68
`PMP’s request for injunctive relief.
`
`
`
`PMP may say (and has said) that the limited subjects offered for—
`
`(same limitations as Topic No.
`
`68
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`are related to the eBay factors in some way, but they are at best a subset of the relevant issues, and
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`a small subset at that. RJRV is entitled to examine witnesses on the full scope of PMP’s
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`

`

`Case 1:20-cv-00393-LO-TCB Document 614 Filed 05/14/21 Page 11 of 15 PageID# 13945
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`contentions on each of the eBay factors. PMP should not be allowed to evade that discovery
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`through the use of artful, and unilateral, limitations for its designees.
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`PMP has also refused to designate anyone on any portion of Topic Nos. 69, 76, and 83:
`
`• Topic No. 69: Each fact that PMP alleges supports PMP’s request for a permanent
`
`injunction and that was not present and/or known to PMP on or before June 29, 2020,
`
`including when each such fact became known to PMP.
`
`• Topic No. 76: The drivers of demand for the Reynolds Accused Products.
`
`• Topic No. 83: PMP’s contentions regarding whether and to what extent Reynolds would
`
`suffer any hardships if the Reynolds Accused Products were enjoined.
`
`
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`Each of these topics is relevant and RJRV is entitled to PMP’s testimony on them.
`
`Topic No. 69 relates to facts that PMP alleges support its request for a permanent
`
`injunction, and when PMP knew those facts. As RJRV already explained to PMP,
`
`
`
`
`
`
`
` (Ex. 9 [May 10, 2021, Smith
`
`Letter to Koh] at 2-3.) PMP did not seek injunctive relief when its patents issued. Even after PMP
`
`filed its counterclaims, PMP still waited nearly an additional nine months before introducing a
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`claim for injunctive relief. Facts underlying the reasons for PMP’s delay are clearly relevant. PMP
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`has nonetheless refused a witness, stating that the topic is
`
` (Ex. 12 [May 13, 2021,
`
`Koh Letter to Smith] at 2.)
`
`With respect to Topic Nos. 76 and 83, PMP’s response to both topics is that PMP
`
`
`
` on this topic. (Ex. 12 [May 13, 2021, Koh Letter to
`
`Smith] at 2-3.) If it is PMP’s position that it has no corporate knowledge whatsoever on these
`
`
`
`8
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`

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`Case 1:20-cv-00393-LO-TCB Document 614 Filed 05/14/21 Page 12 of 15 PageID# 13946
`
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`topics and it will rely solely on documents and witnesses from RJRV, PMP must say that in a
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`straightforward way. Otherwise, it must produce a witness.
`
` Topic No. 76
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`(the drivers of demand for the Reynolds Accused Products) directly relevant.
`
`
`
`
`
`
`
`
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`Similarly, with respect to Topic No. 83 (PMP’s contentions regarding whether and to what extent
`
`Reynolds would suffer any hardships if the Reynolds Accused Products were enjoined), PMP bears
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`the burden on the balance of harms eBay factor.
`
`
`
`Despite RJRV’s repeated requests that PMP identify witnesses on the injunction-related
`
`topics, PMP either refused to designate witnesses at all, or has limited its designees’ scope of
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`testimony so much that the vast majority of RJRV’s topics remain unaddressed. Worse yet, besides
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`being non-responsive and obfuscating the issues, PMP’s responses to RJRV’s requests are often
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`accusatory and filled with false suggestions that RJRV is somehow delaying discovery on PMP’s
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`own claim as to which PMP—not RJRV—bears the burden of proof.
`
`
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`Considering that it is the party who injected this injunctive relief claim late into the case,
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`it is inexplicable that PMP is resisting RJRV’s requests seeking discovery of PMP’s purported
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`factual bases supporting PMP’s request for an injunction. Indeed, PMP is fighting tooth-and-nail
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`to prevent RJRV from seeking even the purported facts underlying the eBay factors that PMP bears
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`the burden of proving.
`
`
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`If PMP has reconsidered its request and no longer wishes to prosecute the claim for
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`injunctive relief, it needs to say so. Otherwise, PMP must meaningfully engage in the discovery
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`process, in good faith, and fulfill its Rule 30(b)(6) responsibility to designate witnesses on the full
`
`
`
`9
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`

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`Case 1:20-cv-00393-LO-TCB Document 614 Filed 05/14/21 Page 13 of 15 PageID# 13947
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`scope of Topic Nos. 68-70, 72, 76, and 83, and to make those witnesses available a reasonable
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`time after Defendants complete their additional production of injunction-related documents.
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`CONCLUSION
`
`
`
`RJRV respectfully requests that the Court order PMP to designate a corporate witness or
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`witnesses to testify on the full scope of Topic Nos. 68-70, 72, 76, and 83; and for PMP to make
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`those designees available at least 5 days after Defendants complete their production of injunction-
`
`related document discovery.
`
`
`
`10
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`

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`Case 1:20-cv-00393-LO-TCB Document 614 Filed 05/14/21 Page 14 of 15 PageID# 13948
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`Respectfully submitted,
`
`
`
`
`
` /s/ David M. Maiorana
`David M. Maiorana (VA Bar No. 42334)
`Ryan B. McCrum
`JONES DAY
`901 Lakeside Ave.
`Cleveland, OH 44114
`Telephone: (216) 586-3939
`Facsimile: (216) 579-0212
`Email: dmaiorana@jonesday.com
`Email: rbmccrum@jonesday.com
`
`John J. Normile
`JONES DAY
`250 Vesey Street
`New York, NY 10281
`Telephone: (212) 326-3939
`Facsimile: (212) 755-7306
`Email: jjnormile@jonesday.com
`
`
`Alexis A. Smith
`JONES DAY
`555 South Flower Street
`Fiftieth Floor
`Los Angeles, CA 90071
`Telephone: (213) 243-2653
`Facsimile: (213) 243-2539
`Email: asmith@jonesday.com
`
`Charles B. Molster, III Va. Bar No. 23613
`THE LAW OFFICES OF
`CHARLES B. MOLSTER, III PLLC
`2141 Wisconsin Avenue, N.W. Suite M
`Washington, DC 20007
`Telephone: (703) 346-1505
`Email: cmolster@molsterlaw.com
`
`Counsel for Plaintiffs RAI Strategic Holdings,
`Inc. and R.J. Reynolds Vapor Company
`
`
`Dated: May 14, 2021
`
`
`
`Stephanie E. Parker
`JONES DAY
`1420 Peachtree Street, N.E.
`Suite 800
`Atlanta, GA 30309
`Telephone: (404) 521-3939
`Facsimile: (404) 581-8330
`Email: separker@jonesday.com
`
`
`Anthony M. Insogna
`JONES DAY
`4655 Executive Drive
`Suite 1500
`San Diego, CA 92121
`Telephone: (858) 314-1200
`Facsimile: (844) 345-3178
`Email: aminsogna@jonesday.com
`
`William E. Devitt
`JONES DAY
`77 West Wacker
`Suite 3500
`Chicago, IL 60601
`Telephone: (312) 269-4240
`Facsimile: (312) 782-8585
`Email: wdevitt@jonesday.com
`
`Sanjiv P. Laud
`JONES DAY
`90 South Seventh Street
`Suite 4950
`Minneapolis, MN 55402
`Telephone: (612) 217-8800
`Facsimile: (844) 345-3178
`Email: slaud@jonesday.com
`
`
`
`
`

`

`
`Case 1:20-cv-00393-LO-TCB Document 614 Filed 05/14/21 Page 15 of 15 PageID# 13949
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`CERTIFICATE OF SERVICE
`
`
`
`I hereby certify that on this 14th day of May, 2021, a true and correct copy of the foregoing
`
`was served using the Court’s CM/ECF system, with electronic notification of such filing to all
`
`
`
`
`
`/s/ David M. Maiorana
`David M. Maiorana (VA Bar No. 42334)
`JONES DAY
`901 Lakeside Ave.
`Cleveland, OH 44114
`Telephone: (216) 586-3939
`Facsimile: (216) 579-0212
`Email: dmaiorana@jonesday.com
`
`Counsel for Plaintiffs RAI Strategic Holdings,
`Inc. and R.J. Reynolds Vapor Company
`
`counsel of record.
`
`
`
`
`
`
`
`
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