A supplier that sells an international version of Abbott‘s (NYSE:ABT) FreeStyle Diabetes test strips committed discovery fraud when it forked over only a select group of relevant documents last year, according to a U.S. magistrate judge. Lois Bloom ruled that the supplier, H&H, lost the right to invoke attorney-client privilege when it is deposed about the document production.
The spat dates back to October of 2015, when Abbott requested documents from an array of international pharmacies, distributors, importers and suppliers of its test strips. In January last year, a judge held a conference between Abbott and the named organizations to address various discovery issues.
The judge directed the defendants to review all formal and informal communications regarding the purchase and sale of FreeStyle strips in 2014 – including texts, emails, invoices, purchase orders and more.
One group – H&H – responded saying that they would have to produce 6,000 documents. Abbott acknowledged that this made sense, as H&H is the largest supplier of Abbott’s test strips among the named defendants and has distributed more than 25 million test strips since 2009.
In February of 2017, H&H produced just 315 documents.
While discovery proceeded, Abbott alleged that H&H trafficked in counterfeit test strips and the diabetes company quickly landed permission to seize any communications or products relevant to its test strips at H&H.
And it was this seizure order that gave Abbott access to relevant emails from 2014 that H&H did not produce during discovery.
H&H claimed it was a technical error. When the court directed H&H to re-run the search and produce documents to Abbott in July of 2017, the supplier came back with 3,500 documents.
An independent legal firm reviewed H&H’s search and concluded that the alleged technical glitch explained some of the suppliers’ discrepancies, but not all of them.
H&H then “pivoted,” according to legal documents, and blamed its legal counsel. Abbott alleged that H&H committed discovery fraud and just this week the courts agreed.
“H&H’s deficient February 2017 production in this action goes quite beyond technically challenged or bumbling behavior. That benign characterization of H&H’s conduct is simply disingenuous. The record reflects that H&H’s deficient February 2017 production was calculated and purposeful,” Bloom wrote.
Steve MacMillan took over as CEO of Hologic in 2013, drawing on his experience at medtech titans like Stryker and Johnson & Johnson. Since then, Hologic has grown into a $3 billion business.
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