[Klein Legal, Flatiron — November 19, 2012, 10:47 AM]
"You come very well recommended," the in-house counsel said. "Phillip Reyes speaks highly of your regulatory work. We've had two other firms pass on this matter, and frankly we think that's because they don't understand the CFIUS precedent in device-adjacent regulatory questions, which is going to be central to our defense."
I had not yet said I was taking the case.
The call had arrived at 10:44 — three minutes after Reyes had forwarded me the referral email with the note: Veridion is quality. Defensible case. Good fee rate. Phillip Reyes ran a Philadelphia boutique with an excellent pharmaceutical defense practice and a reputation for not sending Klein Legal garbage, which was why I had taken the call.
"Tell me about the evidence structure," I said.
A small pause. Veridion's in-house counsel — a man named Garrett Oakes, general counsel, ten years in pharmaceutical regulation — had expected a different question. He had expected me to ask about the case value or the preliminary injunction or the class certification status.
"The plaintiffs have filed a class action alleging the Veridion Cardiac Patch caused accelerated arrhythmia events in a subpopulation of users. We have fifteen plaintiffs in the initial class. They're seeking certification for an estimated 3,000 potential class members." He had the cadence of someone who had recited this summary many times in the last two weeks. "We produced discovery on schedule. Our position is that the device performed within its approved parameters and that the adverse events were within the disclosed risk profile."
"What's the production volume."
"We produced 47,000 pages. Standard for a device matter of this complexity."
"What's the custodian count."
Another pause. Slightly longer.
"We had twenty-three custodians in scope."
"Including product development."
"Yes."
"All phases of development."
"...Our discovery process was thorough."
I had been running the Library at a low burn since the call started — basic-search bandwidth, no LP cost. The return was a tag chain I had not asked for: #evidence-structure-flag. Veridion Cardiac Patch / production 47K / custodians 23 / device development timeline: 2007-2011. Cross-reference: adverse event literature 2009-2010. Gap: internal biocompatibility study, Phase 2 testing window.
The Library could flag a gap. It couldn't tell me what was in the gap. But the gap was specific — a Phase 2 testing window where a biocompatibility study should have existed and had not appeared in the produced documents.
"Mr. Oakes," I said. "I'll need the complete privilege log before I can give you an answer."
"The privilege log—" He stopped. "Of course. We can have that to you by Wednesday."
"Thank you. I'll be in touch."
I ended the call.
The Library, in the background, was still flagging the same gap. Not a conjecture. A structural absence. The 47,000 pages had been produced against a 23-custodian scope that included product development. A Phase 2 biocompatibility study would be a product development document. If it existed and was not produced, it was either logged on the privilege log — which would tell me something — or it was not logged at all, which would tell me something else.
I opened the FedEx binder that Veridion's team had couriered over with the initial case documents.
The binder was approximately 400 pages: the class action complaint, the preliminary injunction motion and opposition, the first tranche of produced documents, and Veridion's summary defense brief. Standard for an early-stage defense engagement. I set my right hand on the brief's cover page.
Three seconds.
The binder had been handled recently by three people: a paralegal (bureaucratic anxiety, the specific quality of someone meeting a deadline they had not set), an attorney (professional, reviewing, the clean attention of someone who understood the documents and was satisfied with how they looked), and a third person whose trace was slightly different — an edge of something, a layer of careful management that was not the same as falseness. Documents carefully curated to carry a specific narrative and not another one.
Not a suppressed study that was obviously absent. Documents arranged to make an absence invisible.
The Library: #absorption-flag: document curation — potential suppressed evidence. Confidence: moderate. Recommend privilege log review.
Moderate confidence. Not high. The privilege log would tell me whether there was a logged study or just a gap.
Harold appeared in the doorway.
"Reyes called," he said. "He wanted to make sure the referral landed."
"It landed."
"He said the fee rate is twenty percent above Klein Legal's standard billing for defense work." Harold came in. He sat. He had the specific posture of a man about to make a financial argument he believes is correct. "We've been at four active matters since Voss signed in October. The quarterly revenue is improving. But the Cross retainer was a one-time large engagement — it won't repeat at that volume. The Veridion case would anchor our Q1 and Q2."
"I know."
"It's the case we need." He paused. "The regulatory background from London fits. We would be genuinely qualified to run this defense."
"I know that too."
He looked at me. The look did not press. He had made the argument; he was leaving it there.
I appreciated the way Harold argued now. In the second year he had argued with the urgency of someone who needed to be heard. In the third year he argued with the confidence of someone who had been right enough times to trust his own judgment. The argument he was making was correct. The financial pressure was real and the case fit the firm's emerging specialty and the fee rate was excellent.
None of that settled what the Library had flagged.
After Harold left, I ran a PACER search on Veridion's prior litigation history. Standard due diligence. Two prior class actions, both settled. Both within the normal range for device matters.
Then I ran the financial contact search — the specific contact at a boutique trading desk who had mentioned Maren's name in passing two weeks ago, in the context of a Veridion earnings story that had run in a pharmaceutical trade publication. The contact had said, as a throwaway: "Maren Vance is short that stock. Has been since September."
September. When the mass-tort class action was filed. When the defendant company would have been assessing its exposure.
A person with a short position on a pharmaceutical defendant in a mass-tort class action was betting that the litigation would hurt the company. Either they believed the company had genuine liability — in which case a strong defense was a good trade because a strong defense would delay the price impact — or they knew something about the suppressed evidence that would eventually surface.
The Library, running a cross-reference on the Maren signal: #maren-vance — Veridion short position confirmed (financial contact Ch.110). Cross-reference: #self-deception-micro-fracture pending.
I sat with the binder on my desk for a long time. Harold was right about the financial argument. The Library had a moderate-confidence flag that the company had produced a curated document set. The privilege log was coming Wednesday. Maren was short Veridion.
The decision sat in the room the way decisions with real weight sit: not demanding, not urgent, just present, waiting to be the thing I was holding when I understood what I was actually choosing.
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