In the News: Sanctions Recommended Against Law Firm Representing Endo Pharmaceuticals in New York State Opioid Trial

As the sprawling New York State opioid trial heads into the last week of October, attention has shifted toward a court-commissioned referee report recommending sanctions against the defense law firm Arnold & Porter Kaye Scholer (APKS), which represented Endo Pharmaceuticals in the ongoing case.

Prior to Endo Pharmaceuticals’s recent $50 million settlement with New York State and Suffolk and Nassau Counties and their subsequent severing from the trial, state and county representatives accused Endo’s legal counsel, APKS, of withholding potentially “damning evidence” regarding its marketing and sales of prescription opioids during the discovery phase of the trial — an accusation for which the firm was found to be in contempt of court in a similar opioid case in Tennessee.

Assigned to referee the accusations against Endo’s legal representatives, retired New York State Judge Joseph Maltese concluded in the recently released report Endo was likely aware of the documents it failed to disclose during the trial’s discovery phase.

Moreover, Judge Maltese noted if the state and county attorneys had access to the documents Endo failed to disclose, they likely would have succeeded in using them to further support their legal accusations against Endo, specifically regarding the company’s reckless and aggressive marketing and sales tactics. Maltese did not mince words when saying APKS “was deficient in not timely disclosing those documents.”

“Consequently,” the judge continued, “all of the plaintiffs were prejudiced by this delay and, accordingly, the court should fashion an equitable remedy for this failure to timely disclose those documents.”

Referring to the upcoming national multidistrict litigation (MDL) hearing, the judge suggested, “[APKS] slipped those voluminous documents into the MDL, while failing to give [the New York] court the notice of their existence, perhaps in the hope that the plaintiffs counsel was too preoccupied with the ongoing trial to notice them.”

About Judge Maltese’s report concerning APKS’s conduct, Simmons Hanly Conroy Partner Jayne Conroy said:

“Discovery gamesmanship will not be tolerated in New York, especially when, as here, failure to provide relevant discovery directly prejudiced plaintiffs’ prosecution of its case. Referee Justice Maltese, after analysis of thousands of pages of motion papers and exhibits, found that the explanations and excuses proffered by APKS concerning their discovery violations were insufficient and inconsistent with the facts. He also found that APKS’ evasive and untimely discovery prejudiced plaintiffs’ presentation of their case.”

At the conclusion of his 20-page report, Judge Maltese recommended that Suffolk County Supreme Court Justice Jerry Garguilo, who presides over the New York trial, require APKS to cover any plaintiff attorney fees associated with the discovery phase of the trial. In addition, he also recommended further monetary sanctions against APKS, but stopped short of stating a specific amount, instead leaving it to the court’s discretion.

Judge Maltese also recommended against Justice Garguilo barring APKS from representing Endo in any future litigation. He also denied harsher requests for discipline against APKS, including the disbarment of certain APKS attorneys.

While it was Judge Maltese’s court-commissioned report on APKS that grabbed media attention in recent weeks, the New York trial continues against remaining defendants Allergan Finance (a subsidiary of AbbVie Inc.), Teva Pharmaceutical Industries Ltd. and Anda, Inc.

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