1018-00007 · Penterra Pharmaceuticals Corp · Correspondence

letter-meet-and-confer-privilege-log.docx DOCUMENT Litigation

4 / 35 ← → ✕

CALDERWOOD & HARKNESS LLP Attorneys at Law 1 Federal Street, 35th Floor Boston, Massachusetts 02110

Telephone: (617) 542-8800 Facsimile: (617) 542-8801

October 4, 2021

Via Email and First-Class Mail

Kenneth M. Rourke, Esq. Hargrove, Sinclair & Polk LLP 200 Ashbury Asset Advisors, Suite 1800 Boston, MA 02109

Re: Penterra Pharmaceuticals Corp. v. Vantage Medical Distribution, LLC, Docket No. 2184-CV-01537-BLS (Massachusetts Superior Court, Business Litigation Session, Suffolk County)

Meet-and-Confer Regarding Privilege Log Dispute

Dear Mr. Rourke:

We write on behalf of our client, plaintiff Penterra Pharmaceuticals Corp. ("Penterra"), in connection with the above-captioned matter. This letter is submitted pursuant to the parties' meet-and-confer obligations under Superior Court Rule 9C and the Standing Order of the Business Litigation Session, and is intended to set forth Penterra's position regarding the privilege log dispute raised in your correspondence dated September 28, 2021. In that letter, counsel for defendant Vantage Medical Distribution, LLC ("Vantage") challenged certain entries on the privilege log that Penterra served in connection with its Responses and Objections to Vantage's First Request for Production of Documents. Penterra is willing to engage in a good-faith meet-and-confer to address Vantage's concerns, and we remain hopeful that this dispute can be resolved informally without the need for judicial intervention.

I. Background of the discovery Dispute

As you are aware, on or about September 3, 2021, Vantage served its First Request for Production of Documents on Penterra. Penterra timely served its Responses and Objections to Vantage's First Request for Production of Documents, together with an accompanying privilege log, on September 22, 2021. Penterra's privilege log identified a total of forty-seven (47) documents that were withheld or redacted, in whole or in part, on the basis of the attorney-client privilege and/or the work product doctrine. The log was organized by custodian and date, and each entry contained a description of the document sufficient to allow Vantage to evaluate the asserted basis for the privilege claim.

On September 28, 2021, your firm transmitted a letter to our office on behalf of Vantage, challenging certain specific entries on Penterra's privilege log. Vantage's letter focused on a discrete series of communications between Jennifer Chao, Esq., General Counsel of Penterra, and Steven Kapoor, Vice President of Commercial Operations of Penterra. Vantage's position, as articulated in that letter, is that these communications between in-house counsel and a business executive are not protected by the attorney-client privilege because they purportedly "concerned commercial distribution operations rather than the provision or receipt of legal advice." Vantage further asserted that any privilege that might otherwise attach was waived because the communications were allegedly "made in the ordinary course of business" and were "indistinguishable from routine operational correspondence."

Penterra disagrees with Vantage's characterization of both the nature of these communications and the applicable legal standards. We address each of Vantage's arguments in turn below.

II. Identification of the Challenged Privilege Log Entries

The entries challenged in Vantage's September 28, 2021 letter fall within a discrete and identifiable category: communications between Jennifer Chao, Esq. (General Counsel of Penterra) and Steven Kapoor (Vice President, Commercial Operations of Penterra) dating from approximately September 2020 through March 2021. Specifically, the earliest challenged communication is dated on or about September 18, 2020—shortly after Vantage commenced unauthorized shipments of Oncalaris® (pegvisomant-axel) into the tri-state area of New York, New Jersey, and Pennsylvania on or about September 14, 2020—and the latest challenged communication is dated on or about March 5, 2021, several days before Penterra transmitted its March 8, 2021 cease-and-desist letter to Vantage's CEO, Donald Farnham.

These communications relate to Vantage's expansion of Oncalaris® distribution into New York, New Jersey, and Pennsylvania and, more specifically, to Penterra's assessment of its legal rights and remedies under the Exclusive Distribution Agreement dated July 1, 2017 (the "EDA"), including interpretation of the territorial restrictions set forth therein. In total, Vantage's letter challenges approximately sixteen (16) entries on the privilege log, encompassing both email communications and internal memoranda.

Penterra notes that each of the challenged entries on its privilege log was described with the level of specificity required under applicable law and the Standing Order of the Business Litigation Session. Each entry identified, at a minimum, the following: (a) the date of the communication; (b) the author or sender; (c) the recipient(s); (d) a subject-matter description sufficient to assess the privilege claim without revealing the privileged content itself; and (e) the specific legal basis for the privilege claim (i.e., attorney-client privilege, work product doctrine, or both). Penterra's log therefore complied with the requirements for privilege logs as articulated by courts in the Business Litigation Session and elsewhere in this Commonwealth.

III. Penterra's Legal Position on Attorney-Client Privilege

A. The Communications Were Made for the Purpose of Obtaining Legal Advice

The challenged communications were between Penterra's General Counsel, Jennifer Chao, Esq., and a senior business executive, Steven Kapoor, and were made for the predominant purpose of obtaining and providing legal advice regarding Penterra's rights and obligations under the EDA. In-house counsel occupies a dual role within any corporation, and Massachusetts law has long recognized that communications with in-house counsel are entitled to the protection of the attorney-client privilege when those communications are made for the purpose of seeking or rendering legal advice, even where the communications also touch upon matters of business concern. The critical inquiry under Massachusetts law is not whether the communication contains any reference to business operations, but rather whether the predominant purpose of the communication was to obtain or provide legal advice. See, e.g., Commissioner of Revenue v. Granite Harbor Partners LLC, 453 Mass. 293, 310 (2009); Suffolk Constr. Co. v. Division of Capital Asset Mgmt., 449 Mass. 444, 449–50 (2007).

Here, the predominant purpose of the challenged communications is clear from the privilege log descriptions and, should the Court be called upon to review them, from the face of the documents themselves. Mr. Kapoor consulted Ms. Chao specifically to assess whether Vantage's distribution of Oncalaris® in the tri-state area—New York, New Jersey, and Pennsylvania—constituted a breach of Section 2.3 of the EDA. Section 2.3 of the EDA expressly prohibits the distributor from distributing Oncalaris® or any other Covered Product outside the "Territory" (as defined in Exhibit A to the EDA) without the Supplier's prior written consent. The Territory, as defined in Exhibit A, encompasses six New England states: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. Ms. Chao was asked to analyze whether the tri-state expansion fell outside this defined Territory and, if so, what legal remedies were available to Penterra, including breach of contract, injunctive relief, and termination of the EDA.

In addition, Ms. Chao was advising Mr. Kapoor on the legal implications of the January 12, 2018 email from Mr. Kapoor to Donald Farnham, the Chief Executive Officer of Vantage (the "Kapoor Email"). As Vantage is aware, the Kapoor Email is a central document in this litigation, and Vantage has contended that the Kapoor Email constitutes "prior written consent" within the meaning of Section 2.3 of the EDA or, alternatively, that it constitutes an amendment to Exhibit A expanding the defined Territory to include the tri-state area. Ms. Chao provided legal analysis to Mr. Kapoor regarding whether the Kapoor Email could be construed as "prior written consent" under Section 2.3, and whether such an email—sent by a Vice President of Commercial Operations, rather than by an authorized signatory as required by Section 13.2 of the EDA—could constitute a valid amendment to Exhibit A under Section 13.1 of the EDA. Section 13.1 provides, in relevant part, that "[n]o amendment, modification, or supplement to this Agreement shall be effective unless in writing and signed by authorized representatives of both Parties." Ms. Chao's analysis necessarily required consideration of the EDA's integration clause (Section 14.8), which provides that the EDA "constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior negotiations, representations, warranties, commitments, offers, contracts, and writings."

These are quintessentially legal questions concerning contract interpretation, the enforceability of contractual provisions, and the availability of legal remedies. The fact that Mr. Kapoor is a business executive, and the fact that the underlying subject matter—pharmaceutical distribution—is a business operation, does not alter the fundamentally legal character of the advice that Ms. Chao was asked to provide and did provide. Massachusetts courts have consistently recognized that communications between in-house counsel and business employees are privileged where, as here, the employee is consulting counsel for legal guidance, not merely discussing day-to-day operational matters. See Suffolk Constr. Co., 449 Mass. at 450–51; see also Upjohn Co. v. United States, 449 U.S. 383, 394–95 (1981) (holding that the attorney-client privilege extends to communications between corporate counsel and corporate employees at all levels of the corporate hierarchy, where the communications are made for the purpose of obtaining legal advice).

B. The Communications Were Made in Anticipation of Litigation

Even apart from the attorney-client privilege, many of the challenged communications are independently protected under the work product doctrine. By September and October 2020, Penterra was aware that Vantage had begun shipping Oncalaris® to hospitals, oncology clinics, and specialty pharmacies in New York, New Jersey, and Pennsylvania without Penterra's authorization and in apparent breach of Section 2.3 of the EDA. Penterra's internal records, including correspondence referenced on the privilege log, confirm that by late 2020, Penterra was actively investigating the scope of Vantage's unauthorized distribution activities and evaluating its legal options.

By early 2021, litigation was not merely foreseeable—it was imminent. Penterra retained Calderwood & Harkness LLP pursuant to an engagement letter dated March 29, 2021, but pre-engagement consultations between Penterra and this firm commenced several weeks prior to that date. Moreover, the record confirms that litigation was anticipated by both parties well before March 2021. In particular, on March 22, 2021, your firm transmitted a letter on behalf of Vantage to Jennifer Chao in which Vantage threatened a counterclaim seeking approximately $35 million in damages for alleged breach of contract and tortious interference with advantageous business relationships. The March 22, 2021 letter from Hargrove, Sinclair & Polk LLP stated explicitly that Vantage "will not hesitate to pursue all available legal remedies" if Penterra proceeded with its threatened litigation. This correspondence confirms beyond any reasonable dispute that litigation was reasonably anticipated by both sides no later than March 2021, and in Penterra's view, considerably earlier.

The challenged communications were created during a period in which litigation was reasonably anticipated and, in many instances, reflect Ms. Chao's mental impressions, legal theories, analysis of the strengths and weaknesses of Penterra's legal position, and preliminary litigation strategy. To the extent any of these communications constitute work product, they are entitled to heightened protection as "opinion" work product reflecting the attorney's thought processes, and Vantage cannot overcome this protection absent a showing of extraordinary circumstances. See Hickman v. Taylor, 329 U.S. 495, 510–11 (1947); Ward v. Peabody, 380 Mass. 805, 817–18 (1980).

C. Vantage's Characterization Is Incorrect

Vantage's central contention—that the challenged communications are not privileged because they involved a business executive and concerned "commercial distribution operations"—rests on a fundamental mischaracterization of the applicable legal standard. The attorney-client privilege is not limited to communications between lawyers. It protects confidential communications between a client (including a corporate client, through its officers, directors, and employees) and its attorney when those communications are made for the purpose of obtaining or providing legal advice. The identity of the non-attorney participant does not determine whether the communication is privileged; the purpose of the communication does.

Mr. Kapoor is a senior business executive at Penterra. In that capacity, he possesses knowledge relevant to Penterra's business operations that was necessary for Ms. Chao to render informed legal advice. The fact that Mr. Kapoor communicated business facts to Ms. Chao—including information about Vantage's distribution activities, the scope of shipments into the tri-state area, and the history of the commercial relationship—does not strip the privilege from those communications. To the contrary, such factual communications are precisely the type of information that clients routinely convey to their attorneys to enable the rendition of legal advice, and the privilege attaches to the entire communication, not merely to the portions that contain express legal conclusions. See Upjohn, 449 U.S. at 394–95; Commissioner of Revenue v. Granite Harbor Partners LLC, 453 Mass. at 310–11.

A communication does not lose its privileged character merely because it references, discusses, or incorporates business facts. If Vantage's position were correct, virtually no communication between in-house counsel and a business employee would ever be privileged, because in-house counsel's legal advice almost invariably arises from and relates to the corporation's business activities. Massachusetts courts have rejected this cramped reading of the privilege, and Vantage has cited no authority to the contrary.

Finally, Vantage has not identified any cognizable basis for finding that the attorney-client privilege was waived with respect to these communications. Penterra has not disclosed the substance of these communications to any third party, and the communications were not shared outside of the individuals who had a need to know in connection with Ms. Chao's provision of legal advice.

IV. No Waiver of Privilege

Penterra addresses Vantage's waiver argument directly and in full.

Penterra has at all times maintained the confidentiality of the challenged communications. The communications between Ms. Chao and Mr. Kapoor were not shared with any third party outside of Penterra, and were not disclosed to Vantage, to any co-distributor, or to any other external party. Penterra has taken affirmative steps throughout this litigation to preserve the confidentiality of its privileged materials, including by serving a timely privilege log that identified each withheld or redacted document with the specificity required under applicable law and the Standing Order.

Vantage's suggestion that the privilege was waived because the communications were made "in the ordinary course of business" conflates two distinct legal concepts. The "ordinary course of business" doctrine, to the extent it is relevant at all, pertains to whether a document was prepared primarily for litigation purposes (a work product inquiry) rather than whether the attorney-client privilege applies. Even under that framework, the challenged communications were not routine operational correspondence; they were communications in which a business executive sought and received legal advice from the company's General Counsel regarding a specific legal dispute.

Nor has Penterra placed the substance of these communications "at issue" in this litigation so as to effect an implied waiver of the privilege. Penterra's claims in this action rest on the plain language of the EDA, including Section 2.3, Exhibit A, and the integration clause at Section 14.8; on the publicly available Kapoor Email dated January 12, 2018; and on the undisputed facts regarding Vantage's distribution of Oncalaris® in the tri-state area. Penterra has not asserted any claim or defense that depends upon the content of privileged attorney-client communications, and has not made any disclosure that would be inconsistent with maintaining the privilege.

Vantage's letter also appears to suggest that the privilege was waived because Jennifer Chao was the author of the March 8, 2021 cease-and-desist letter to Donald Farnham. This argument is without merit. The cease-and-desist letter was a communication to Vantage—it was, by definition, not a confidential attorney-client communication. The fact that Ms. Chao authored that letter does not waive the privilege over the internal attorney-client communications that preceded, informed, or followed the cease-and-desist letter. Sending a demand letter to an adversary does not open the door to discovery of all prior privileged communications on the same subject matter. Massachusetts law does not recognize such a broad implied waiver doctrine, and Vantage has cited no authority supporting that proposition. See Darius v. City of Boston, 433 Mass. 274, 283–84 (2001) (noting that waiver of the attorney-client privilege must be established by clear and convincing evidence and is not to be lightly inferred).

V. Proposed Resolution

Penterra remains committed to resolving this dispute without the need for court intervention. To that end, Penterra proposes the following steps:

1. Supplemental Privilege Log Descriptions. Penterra is willing to provide supplemental descriptions for the challenged entries on its privilege log. These supplemental descriptions would provide Vantage with additional context regarding the predominant purpose of each communication, including more detailed subject-matter descriptions, without disclosing the privileged content of the communications themselves. Penterra believes that this additional information will address many, if not all, of Vantage's concerns.

2. *In Camera* Review. If, after reviewing the supplemental privilege log descriptions, Vantage remains unsatisfied with Penterra's privilege claims, Penterra is willing to submit the challenged documents for in camera review by the Honorable Diane L. Costigan, J., who is presiding over this matter in the Business Litigation Session. In camera review is the well-established and appropriate mechanism for resolving privilege disputes where, as here, the parties cannot reach agreement through the meet-and-confer process. Penterra is confident that in camera review will confirm that the challenged communications are properly protected by the attorney-client privilege and/or the work product doctrine.

3. Telephonic Meet-and-Confer. Penterra proposes that the parties participate in a telephonic meet-and-confer at a mutually convenient time during the week of October 11, 2021, to discuss the foregoing proposals and any other steps that may facilitate resolution of this dispute.

As both parties are aware, the fact discovery deadline in this matter is January 14, 2022, as established at the Initial Case Management Conference held before Judge Costigan on June 18, 2021. The parties should endeavor to resolve this privilege log dispute promptly so that it does not impede the orderly progress of discovery or necessitate any modification to the existing discovery schedule.

VI. Reservation of Rights

Penterra expressly reserves all rights and objections in connection with the matters addressed in this letter, including without limitation the right to assert additional grounds for privilege or protection, the right to seek a protective order under Mass. R. Civ. P. 26(c) if Vantage pursues a motion to compel production of the challenged documents, and the right to oppose any such motion on all applicable grounds. Nothing in this letter, and no offer or proposal contained herein, shall be deemed a waiver of any privilege, protection, objection, or right that Penterra has asserted or may assert in the future. This letter is submitted solely for the purpose of meeting the parties' meet-and-confer obligations under Superior Court Rule 9C and the Standing Order of the Business Litigation Session, and may not be used for any other purpose.

We reiterate Penterra's good-faith willingness to resolve this discovery dispute through the informal meet-and-confer process and without the need for motion practice. We trust that Vantage shares this commitment, and we look forward to discussing the proposed resolution outlined above at the parties' earliest mutual convenience.

Please have your office contact Hannah Brinkley at Calderwood & Harkness LLP to schedule the telephonic meet-and-confer. Ms. Brinkley can be reached at the contact information below.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Hannah Brinkley Associate 1 Federal Street, 35th Floor Boston, MA 02110 Direct Dial: (617) 542-8847

Email: hbrinkley@calderwoodharkness.com

cc: Jennifer Chao, Esq., General Counsel, Penterra Pharmaceuticals Corp. (via email)

Linda Osei, Esq., Calderwood & Harkness LLP (via email)

Alicia Fontaine, Esq., Hargrove, Sinclair & Polk LLP (via email and first-class mail)

CALDERWOOD & HARKNESS LLP Attorneys at Law 1 Federal Street, 35th Floor Boston, Massachusetts 02110
Telephone: (617) 542-8800 Facsimile: (617) 542-8801
October 4, 2021
Via Email and First-Class Mail
Kenneth M. Rourke, Esq. Hargrove, Sinclair & Polk LLP 200 Ashbury Asset Advisors, Suite 1800 Boston, MA 02109
Re: Penterra Pharmaceuticals Corp. v. Vantage Medical Distribution, LLC, Docket No. 2184-CV-01537-BLS (Massachusetts Superior Court, Business Litigation Session, Suffolk County)
Meet-and-Confer Regarding Privilege Log Dispute
Dear Mr. Rourke:
We write on behalf of our client, plaintiff Penterra Pharmaceuticals Corp. ("Penterra"), in connection with the above-captioned matter. This letter is submitted pursuant to the parties' meet-and-confer obligations under Superior Court Rule 9C and the Standing Order of the Business Litigation Session, and is intended to set forth Penterra's position regarding the privilege log dispute raised in your correspondence dated September 28, 2021. In that letter, counsel for defendant Vantage Medical Distribution, LLC ("Vantage") challenged certain entries on the privilege log that Penterra served in connection with its Responses and Objections to Vantage's First Request for Production of Documents. Penterra is willing to engage in a good-faith meet-and-confer to address Vantage's concerns, and we remain hopeful that this dispute can be resolved informally without the need for judicial intervention.
I. Background of the discovery Dispute
As you are aware, on or about September 3, 2021, Vantage served its First Request for Production of Documents on Penterra. Penterra timely served its Responses and Objections to Vantage's First Request for Production of Documents, together with an accompanying privilege log, on September 22, 2021. Penterra's privilege log identified a total of forty-seven (47) documents that were withheld or redacted, in whole or in part, on the basis of the attorney-client privilege and/or the work product doctrine. The log was organized by custodian and date, and each entry contained a description of the document sufficient to allow Vantage to evaluate the asserted basis for the privilege claim.
On September 28, 2021, your firm transmitted a letter to our office on behalf of Vantage, challenging certain specific entries on Penterra's privilege log. Vantage's letter focused on a discrete series of communications between Jennifer Chao, Esq., General Counsel of Penterra, and Steven Kapoor, Vice President of Commercial Operations of Penterra. Vantage's position, as articulated in that letter, is that these communications between in-house counsel and a business executive are not protected by the attorney-client privilege because they purportedly "concerned commercial distribution operations rather than the provision or receipt of legal advice." Vantage further asserted that any privilege that might otherwise attach was waived because the communications were allegedly "made in the ordinary course of business" and were "indistinguishable from routine operational correspondence."
Penterra disagrees with Vantage's characterization of both the nature of these communications and the applicable legal standards. We address each of Vantage's arguments in turn below.
II. Identification of the Challenged Privilege Log Entries
The entries challenged in Vantage's September 28, 2021 letter fall within a discrete and identifiable category: communications between Jennifer Chao, Esq. (General Counsel of Penterra) and Steven Kapoor (Vice President, Commercial Operations of Penterra) dating from approximately September 2020 through March 2021. Specifically, the earliest challenged communication is dated on or about September 18, 2020—shortly after Vantage commenced unauthorized shipments of Oncalaris® (pegvisomant-axel) into the tri-state area of New York, New Jersey, and Pennsylvania on or about September 14, 2020—and the latest challenged communication is dated on or about March 5, 2021, several days before Penterra transmitted its March 8, 2021 cease-and-desist letter to Vantage's CEO, Donald Farnham.
These communications relate to Vantage's expansion of Oncalaris® distribution into New York, New Jersey, and Pennsylvania and, more specifically, to Penterra's assessment of its legal rights and remedies under the Exclusive Distribution Agreement dated July 1, 2017 (the "EDA"), including interpretation of the territorial restrictions set forth therein. In total, Vantage's letter challenges approximately sixteen (16) entries on the privilege log, encompassing both email communications and internal memoranda.
Penterra notes that each of the challenged entries on its privilege log was described with the level of specificity required under applicable law and the Standing Order of the Business Litigation Session. Each entry identified, at a minimum, the following: (a) the date of the communication; (b) the author or sender; (c) the recipient(s); (d) a subject-matter description sufficient to assess the privilege claim without revealing the privileged content itself; and (e) the specific legal basis for the privilege claim (i.e., attorney-client privilege, work product doctrine, or both). Penterra's log therefore complied with the requirements for privilege logs as articulated by courts in the Business Litigation Session and elsewhere in this Commonwealth.
III. Penterra's Legal Position on Attorney-Client Privilege
A. The Communications Were Made for the Purpose of Obtaining Legal Advice
The challenged communications were between Penterra's General Counsel, Jennifer Chao, Esq., and a senior business executive, Steven Kapoor, and were made for the predominant purpose of obtaining and providing legal advice regarding Penterra's rights and obligations under the EDA. In-house counsel occupies a dual role within any corporation, and Massachusetts law has long recognized that communications with in-house counsel are entitled to the protection of the attorney-client privilege when those communications are made for the purpose of seeking or rendering legal advice, even where the communications also touch upon matters of business concern. The critical inquiry under Massachusetts law is not whether the communication contains any reference to business operations, but rather whether the predominant purpose of the communication was to obtain or provide legal advice. See, e.g., Commissioner of Revenue v. Granite Harbor Partners LLC, 453 Mass. 293, 310 (2009); Suffolk Constr. Co. v. Division of Capital Asset Mgmt., 449 Mass. 444, 449–50 (2007).
Here, the predominant purpose of the challenged communications is clear from the privilege log descriptions and, should the Court be called upon to review them, from the face of the documents themselves. Mr. Kapoor consulted Ms. Chao specifically to assess whether Vantage's distribution of Oncalaris® in the tri-state area—New York, New Jersey, and Pennsylvania—constituted a breach of Section 2.3 of the EDA. Section 2.3 of the EDA expressly prohibits the distributor from distributing Oncalaris® or any other Covered Product outside the "Territory" (as defined in Exhibit A to the EDA) without the Supplier's prior written consent. The Territory, as defined in Exhibit A, encompasses six New England states: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. Ms. Chao was asked to analyze whether the tri-state expansion fell outside this defined Territory and, if so, what legal remedies were available to Penterra, including breach of contract, injunctive relief, and termination of the EDA.
In addition, Ms. Chao was advising Mr. Kapoor on the legal implications of the January 12, 2018 email from Mr. Kapoor to Donald Farnham, the Chief Executive Officer of Vantage (the "Kapoor Email"). As Vantage is aware, the Kapoor Email is a central document in this litigation, and Vantage has contended that the Kapoor Email constitutes "prior written consent" within the meaning of Section 2.3 of the EDA or, alternatively, that it constitutes an amendment to Exhibit A expanding the defined Territory to include the tri-state area. Ms. Chao provided legal analysis to Mr. Kapoor regarding whether the Kapoor Email could be construed as "prior written consent" under Section 2.3, and whether such an email—sent by a Vice President of Commercial Operations, rather than by an authorized signatory as required by Section 13.2 of the EDA—could constitute a valid amendment to Exhibit A under Section 13.1 of the EDA. Section 13.1 provides, in relevant part, that "[n]o amendment, modification, or supplement to this Agreement shall be effective unless in writing and signed by authorized representatives of both Parties." Ms. Chao's analysis necessarily required consideration of the EDA's integration clause (Section 14.8), which provides that the EDA "constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior negotiations, representations, warranties, commitments, offers, contracts, and writings."
These are quintessentially legal questions concerning contract interpretation, the enforceability of contractual provisions, and the availability of legal remedies. The fact that Mr. Kapoor is a business executive, and the fact that the underlying subject matter—pharmaceutical distribution—is a business operation, does not alter the fundamentally legal character of the advice that Ms. Chao was asked to provide and did provide. Massachusetts courts have consistently recognized that communications between in-house counsel and business employees are privileged where, as here, the employee is consulting counsel for legal guidance, not merely discussing day-to-day operational matters. See Suffolk Constr. Co., 449 Mass. at 450–51; see also Upjohn Co. v. United States, 449 U.S. 383, 394–95 (1981) (holding that the attorney-client privilege extends to communications between corporate counsel and corporate employees at all levels of the corporate hierarchy, where the communications are made for the purpose of obtaining legal advice).
B. The Communications Were Made in Anticipation of Litigation
Even apart from the attorney-client privilege, many of the challenged communications are independently protected under the work product doctrine. By September and October 2020, Penterra was aware that Vantage had begun shipping Oncalaris® to hospitals, oncology clinics, and specialty pharmacies in New York, New Jersey, and Pennsylvania without Penterra's authorization and in apparent breach of Section 2.3 of the EDA. Penterra's internal records, including correspondence referenced on the privilege log, confirm that by late 2020, Penterra was actively investigating the scope of Vantage's unauthorized distribution activities and evaluating its legal options.
By early 2021, litigation was not merely foreseeable—it was imminent. Penterra retained Calderwood & Harkness LLP pursuant to an engagement letter dated March 29, 2021, but pre-engagement consultations between Penterra and this firm commenced several weeks prior to that date. Moreover, the record confirms that litigation was anticipated by both parties well before March 2021. In particular, on March 22, 2021, your firm transmitted a letter on behalf of Vantage to Jennifer Chao in which Vantage threatened a counterclaim seeking approximately $35 million in damages for alleged breach of contract and tortious interference with advantageous business relationships. The March 22, 2021 letter from Hargrove, Sinclair & Polk LLP stated explicitly that Vantage "will not hesitate to pursue all available legal remedies" if Penterra proceeded with its threatened litigation. This correspondence confirms beyond any reasonable dispute that litigation was reasonably anticipated by both sides no later than March 2021, and in Penterra's view, considerably earlier.
The challenged communications were created during a period in which litigation was reasonably anticipated and, in many instances, reflect Ms. Chao's mental impressions, legal theories, analysis of the strengths and weaknesses of Penterra's legal position, and preliminary litigation strategy. To the extent any of these communications constitute work product, they are entitled to heightened protection as "opinion" work product reflecting the attorney's thought processes, and Vantage cannot overcome this protection absent a showing of extraordinary circumstances. See Hickman v. Taylor, 329 U.S. 495, 510–11 (1947); Ward v. Peabody, 380 Mass. 805, 817–18 (1980).
C. Vantage's Characterization Is Incorrect
Vantage's central contention—that the challenged communications are not privileged because they involved a business executive and concerned "commercial distribution operations"—rests on a fundamental mischaracterization of the applicable legal standard. The attorney-client privilege is not limited to communications between lawyers. It protects confidential communications between a client (including a corporate client, through its officers, directors, and employees) and its attorney when those communications are made for the purpose of obtaining or providing legal advice. The identity of the non-attorney participant does not determine whether the communication is privileged; the purpose of the communication does.
Mr. Kapoor is a senior business executive at Penterra. In that capacity, he possesses knowledge relevant to Penterra's business operations that was necessary for Ms. Chao to render informed legal advice. The fact that Mr. Kapoor communicated business facts to Ms. Chao—including information about Vantage's distribution activities, the scope of shipments into the tri-state area, and the history of the commercial relationship—does not strip the privilege from those communications. To the contrary, such factual communications are precisely the type of information that clients routinely convey to their attorneys to enable the rendition of legal advice, and the privilege attaches to the entire communication, not merely to the portions that contain express legal conclusions. See Upjohn, 449 U.S. at 394–95; Commissioner of Revenue v. Granite Harbor Partners LLC, 453 Mass. at 310–11.
A communication does not lose its privileged character merely because it references, discusses, or incorporates business facts. If Vantage's position were correct, virtually no communication between in-house counsel and a business employee would ever be privileged, because in-house counsel's legal advice almost invariably arises from and relates to the corporation's business activities. Massachusetts courts have rejected this cramped reading of the privilege, and Vantage has cited no authority to the contrary.
Finally, Vantage has not identified any cognizable basis for finding that the attorney-client privilege was waived with respect to these communications. Penterra has not disclosed the substance of these communications to any third party, and the communications were not shared outside of the individuals who had a need to know in connection with Ms. Chao's provision of legal advice.
IV. No Waiver of Privilege
Penterra addresses Vantage's waiver argument directly and in full.
Penterra has at all times maintained the confidentiality of the challenged communications. The communications between Ms. Chao and Mr. Kapoor were not shared with any third party outside of Penterra, and were not disclosed to Vantage, to any co-distributor, or to any other external party. Penterra has taken affirmative steps throughout this litigation to preserve the confidentiality of its privileged materials, including by serving a timely privilege log that identified each withheld or redacted document with the specificity required under applicable law and the Standing Order.
Vantage's suggestion that the privilege was waived because the communications were made "in the ordinary course of business" conflates two distinct legal concepts. The "ordinary course of business" doctrine, to the extent it is relevant at all, pertains to whether a document was prepared primarily for litigation purposes (a work product inquiry) rather than whether the attorney-client privilege applies. Even under that framework, the challenged communications were not routine operational correspondence; they were communications in which a business executive sought and received legal advice from the company's General Counsel regarding a specific legal dispute.
Nor has Penterra placed the substance of these communications "at issue" in this litigation so as to effect an implied waiver of the privilege. Penterra's claims in this action rest on the plain language of the EDA, including Section 2.3, Exhibit A, and the integration clause at Section 14.8; on the publicly available Kapoor Email dated January 12, 2018; and on the undisputed facts regarding Vantage's distribution of Oncalaris® in the tri-state area. Penterra has not asserted any claim or defense that depends upon the content of privileged attorney-client communications, and has not made any disclosure that would be inconsistent with maintaining the privilege.
Vantage's letter also appears to suggest that the privilege was waived because Jennifer Chao was the author of the March 8, 2021 cease-and-desist letter to Donald Farnham. This argument is without merit. The cease-and-desist letter was a communication to Vantage—it was, by definition, not a confidential attorney-client communication. The fact that Ms. Chao authored that letter does not waive the privilege over the internal attorney-client communications that preceded, informed, or followed the cease-and-desist letter. Sending a demand letter to an adversary does not open the door to discovery of all prior privileged communications on the same subject matter. Massachusetts law does not recognize such a broad implied waiver doctrine, and Vantage has cited no authority supporting that proposition. See Darius v. City of Boston, 433 Mass. 274, 283–84 (2001) (noting that waiver of the attorney-client privilege must be established by clear and convincing evidence and is not to be lightly inferred).
V. Proposed Resolution
Penterra remains committed to resolving this dispute without the need for court intervention. To that end, Penterra proposes the following steps:
1. Supplemental Privilege Log Descriptions. Penterra is willing to provide supplemental descriptions for the challenged entries on its privilege log. These supplemental descriptions would provide Vantage with additional context regarding the predominant purpose of each communication, including more detailed subject-matter descriptions, without disclosing the privileged content of the communications themselves. Penterra believes that this additional information will address many, if not all, of Vantage's concerns.
2. *In Camera* Review. If, after reviewing the supplemental privilege log descriptions, Vantage remains unsatisfied with Penterra's privilege claims, Penterra is willing to submit the challenged documents for in camera review by the Honorable Diane L. Costigan, J., who is presiding over this matter in the Business Litigation Session. In camera review is the well-established and appropriate mechanism for resolving privilege disputes where, as here, the parties cannot reach agreement through the meet-and-confer process. Penterra is confident that in camera review will confirm that the challenged communications are properly protected by the attorney-client privilege and/or the work product doctrine.
3. Telephonic Meet-and-Confer. Penterra proposes that the parties participate in a telephonic meet-and-confer at a mutually convenient time during the week of October 11, 2021, to discuss the foregoing proposals and any other steps that may facilitate resolution of this dispute.
As both parties are aware, the fact discovery deadline in this matter is January 14, 2022, as established at the Initial Case Management Conference held before Judge Costigan on June 18, 2021. The parties should endeavor to resolve this privilege log dispute promptly so that it does not impede the orderly progress of discovery or necessitate any modification to the existing discovery schedule.
VI. Reservation of Rights
Penterra expressly reserves all rights and objections in connection with the matters addressed in this letter, including without limitation the right to assert additional grounds for privilege or protection, the right to seek a protective order under Mass. R. Civ. P. 26(c) if Vantage pursues a motion to compel production of the challenged documents, and the right to oppose any such motion on all applicable grounds. Nothing in this letter, and no offer or proposal contained herein, shall be deemed a waiver of any privilege, protection, objection, or right that Penterra has asserted or may assert in the future. This letter is submitted solely for the purpose of meeting the parties' meet-and-confer obligations under Superior Court Rule 9C and the Standing Order of the Business Litigation Session, and may not be used for any other purpose.
We reiterate Penterra's good-faith willingness to resolve this discovery dispute through the informal meet-and-confer process and without the need for motion practice. We trust that Vantage shares this commitment, and we look forward to discussing the proposed resolution outlined above at the parties' earliest mutual convenience.
Please have your office contact Hannah Brinkley at Calderwood & Harkness LLP to schedule the telephonic meet-and-confer. Ms. Brinkley can be reached at the contact information below.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Hannah Brinkley Associate 1 Federal Street, 35th Floor Boston, MA 02110 Direct Dial: (617) 542-8847
Email: hbrinkley@calderwoodharkness.com
cc: Jennifer Chao, Esq., General Counsel, Penterra Pharmaceuticals Corp. (via email)
Linda Osei, Esq., Calderwood & Harkness LLP (via email)
Alicia Fontaine, Esq., Hargrove, Sinclair & Polk LLP (via email and first-class mail)

CALDERWOOD & HARKNESS LLP Attorneys at Law 1 Federal Street, 35th Floor Boston, Massachusetts 02110

CALDERWOOD & HARKNESS LLP

Record

Parties

Dates

Amounts