United States District Court, E.D. North Carolina, Southern Division
FREDRIC N. ESHELMAN, Plaintiff,
PUMA BIOTECHNOLOGY, INC., Defendant.
B. Jones, Jr., United States Magistrate Judge
matter is before the court on the motion of non-party movant
Pharmaceutical Product Development, LLC ("PPD") to
quash or, in the alternative, to enter a protective order
limiting the scope of information PPD is required to produce
in response to: (1) a subpoena to testify at a deposition in
a civil action issued by Defendant Puma Biotechnology, Inc.
("Defendant"); (2) a subpoena to testify at a
deposition in a civil action issued by Plaintiff Fredric N.
Eshelman ("Plaintiff); and (3) a subpoena duces tecum
issued by Defendant. [DE-125]. Plaintiff and Defendant have
responded separately in opposition to the motion [DE-135,
-136] and the matter is ripe for disposition. For the
following reasons, PPD's motion to quash or for entry of
a protective order [DE-125] is ALLOWED in part and DENIED in
Ketek Clinical Trial
November 1, 2001, Aventis Pharmaceuticals, Inc.
("Aventis") entered into a contract with PPD, under
which PPD was to perform clinical research services in
connection With a clinical study to determine the safety and
effectiveness of Ketek, a drug developed to treat respiratory
tract infections. Compl. [DE-1] ¶¶ 22, 23.
Plaintiff was the CEO of PPD at the time of the
contract's execution and subsequently during the Ketek
clinical trial. Id. ¶ 23. According to
Plaintiff, Aventis retained the responsibility for quality
assurance under the contract, and PPD was to report to
Aventis any physician serving as a clinical investigator who
did not comply with the study plan. Id. Plaintiff
contends that, pursuant to the contract, PPD did not have the
authority to end a clinical investigator's participation
in the study or to report a clinical investigator's
conduct to the FDA. Id.
November 5, 2001, Aventis, through PPD, entered into a
contract with Dr. Maria Anne Kirkman-Campbell
("Kirkman-Campbell"), under which Kirkman-Campbell
was to participate in the Ketek clinical trial as a clinical
investigator. Id. ¶ 24. Under the terms of the
contract, Kirkman-Campbell agreed to conduct the study in
strict compliance with the criteria set forth in the study
protocol. Id. Kirkman-Campbell disregarded her
obligations under the contract by submitting false
documentation to PPD and Aventis concerning the Ketek
clinical trial. Id. at ¶ 25.
to the complaint, after discovering "red flags"
relating to Kirkman-Campbell, PPD personnel notified Aventis
and recommended that Aventis exclude the Kirkman-Campbell
data from the Ketek clinical trial. Id. ¶ 26.
Plaintiff contends that once he was "generally
apprised" of what was known at the time about the
situation, he instructed PPD's head of quality assurance
to place a call directly to Aventis' head of quality
assurance. Id. Plaintiff also cooperated in bringing
Kirkman-Campbell's misconduct to light. Id.
According to Plaintiff, at no time did he participate in,
authorize, or condone Kirkman-Campbell's fraud, nor was
he involved in her fraud in any way. Id. ¶ 27.
Marie Cisneros ("Cisneros"), a former PPD Senior
Clinical Research Associate, assisted in monitoring the Ketek
clinical trial. PL's Mem. Opp'n. Ex. 3 [DE-135-3] at
6. Cisneros testified before the United States House of
Representatives about her observations and what she learned
monitoring Kirkman-Campbell, as well as her discussions about
Kirkman-Campbell with PPD and Aventis. Id. at 6-7.
Plaintiff also testified before Congress regarding PPD's
role in the Ketek clinical trial. PL's Mem. Opp. [DE-135]
Plaintiffs Claims of Defamation
October 2015, Plaintiff, a stockholder of Defendant, proposed
that Defendant increase the size of its board from five to
nine directors and elect Plaintiff and three other nominees
to the board. Compl. [DE-1] ¶ 29; [DE-20-6]. Defendant
responded to Plaintiffs solicitation by mailing a consent
revocation to stockholders which directed stockholders to the
homepage of Defendant's investor-relations website for
further consent revocation materials. Compl. ¶ 10;
[DE-20-5]. Plaintiff alleges that Alan H. Auerbach
("Auerbach"), Defendant's CEO, defamed him in
an investor presentation to stockholders charging Plaintiff
with committing scientific fraud in the Ketek clinical trial.
Compl. ¶¶ 1, 33. In particular, Plaintiff alleges
the following statements contained in the investor
presentation falsely charge him with scientific fraud in the
clinical trial of Ketek and falsely allege that such fraud
resulted in him being replaced as the CEO of PPD:
"Eshelman Continues to Demonstrate a Lack of
"Eshelman's misrepresentations are no surprise given
"Eshelman was Chief Executive Officer (CEO) of
Pharmaceutical Product Development (PPD) when it managed a
clinical trial during the development of the antibiotic drug
Ketek . . . Fraud was uncovered in this trial by the
FDA's Office of Criminal Investigation."
"As Chief Executive Officer of PPD, Eshelman was forced
to testify before Congress regarding PPD's involvement in
this clinical trial fraud in 2008"
"Eshelman was replaced as CEO of PPD in 2009"
"Puma's Board does not believe that someone who was
involved in clinical trial fraud that was uncovered by the
FDA should be on the Board of Directors of a public company;
particularly a company that is in the process of seeking FDA
Id. ¶ 33; Ex. A [DE-1-1] at 14-15.
January 20, 2016, by letter to Defendant, Plaintiff demanded
an apology and retraction of these statements, asserting that
it is known and well-documented in the public record that PPD
discovered and reported the fraud under Plaintiffs
leadership. Compl. [DE-1] ¶ 35. He contended that these
actions by PPD led to criminal charges being filed against
Kirkrnan-Campbell and that the United States Attorney
subsequently identified PPD as a victim of the fraud
committed by Kirkman-Campbell in the criminal indictment
filed July 24, 2008. Id. On January 27, 2016,
Defendant responded to Plaintiffs letter by refusing to
correct and/or retract its original statements and by
threatening to reveal additional information about Plaintiff
to the shareholders. Id. ¶ 37.
complaint, Plaintiff asserts claims of libel per se and libel
per quod with respect to the statements supra issued
by Defendant regarding Plaintiffs role in the Ketek clinical
trial. On February 21, 2017, Defendant answered the complaint
and asserted counterclaims of libel per se and libel per quod
against Plaintiff on the basis of statements he made on
November 30, 2015, and January 4, 2016, during the proxy
contest. Answer [DE-86]. Defendant also asserted ten
defenses, primarily challenging Plaintiffs claims based on
the elements required to prove libel (i.e., truth, malice,
publication). Id. at 20-21. On June 12, 2017, the
court dismissed Defendant's counterclaims as time-barred.
[DE-116] at 9-10, 12-13.
Third-Party Subpoenas to PPD
1, 2017, Defendant caused to be issued upon PPD a subpoena to
testify at deposition and a notice to take the deposition
pursuant to Fed.R.Civ.P. 30(b)(6). PPD Mot. Ex. A [DE-125-1].
Defendant designated the following matters for examination:
1. PPD's code of ethics, employee handbook, and all
policies, procedures and training materials relating to
honesty, integrity, or ethics that were ...