In Re National Prescription Opiate Litigation

927 F.3d 919 (6th Cir. 2019)

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Nature of the Case

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Facts

Ps are 1,300 public entities including cities, counties, and Native American tribes. Defendants (Ds) are manufacturers, distributors, and retailers of prescription opiate drugs. The United States DOJ and DEA are not parties but are involved in this appeal as Interested Parties-Appellees. HDM and Post are not parties but are involved in this appeal as Intervenors-Appellants. Ps seek to recover the costs of life-threatening health issues caused by the opioid crisis. Ps subpoenaed the DEA to produce transactional data for all 50 States and several Territories from its ARCOS database. The ARCOS database is 'an automated, comprehensive drug reporting system which monitors the flow of DEA controlled substances from their point of manufacture through commercial distribution channels to point of sale or distribution at the dispensing/retail level - hospitals, retail pharmacies, practitioners, mid-level practitioners, and teaching institutions.' The data in the database is provided by drug manufacturers and distributors and includes 'supplier name, registration number, address and business activity; buyer name, registration number, and address; as well as drug code, transaction date, total dosage units, and total grams.' The district court concluded that Ps need to discover how and where the problems grew and disclosure is a reasonable step toward defeating the opioid epidemic. Ps and the DEA stipulated to a protective order concerning the DEA's disclosure of the ARCOS data. The district court adopted the Protective Order that the ARCOS data shall remain confidential and shall be used only for litigation purposes or in connection with state and local law enforcement efforts. The district court then directed the DEA to comply with Ps' subpoena by producing ARCOS data pertaining to Ohio, West Virginia, Illinois, Alabama, Michigan, and Florida for the period of 2006 through 2014. The DEA objected. The district court found that the DEA had not met its burden of showing 'good cause' for not disclosing the data. The court found that 'the extent to which each defendant and potential defendant engaged in the allegedly fraudulent marketing of opioids, filling of suspicious orders, and diversion of drugs . . . can be revealed only by all of the data.' The DEA complied. HDM filed a West Virginia Freedom of Information Act request seeking the ARCOS data that a county received as a Plaintiff in the litigation, and Post filed similar public records requests with counties in Ohio who were also Plaintiffs. The counties notified the district court and the DEA and Ds objected to them. The district court held that the public records requests must be denied because the requests were barred by the court's Protective Order. It held that Ds and the DEA had demonstrated 'good cause' for the Protective Order's application to such requests, as required under Rule 26(c)(1). The district court found that the ARCOS data 'is sensitive to pharmacies and distributors because it is confidential business information; and it is sensitive from the DEA's perspective because it is crucial to law enforcement efforts.' The court noted that the Freedom of Information Act (FOIA) 'exempts from public disclosure any confidential commercial information, the disclosure of which is likely to cause substantial competitive harm.' The court concluded that the ARCOS data 'is not a record generated by the Counties' that would be subject to state public records requests. The Intervenors appealed.