West Virginia Record

WHEELING -- The Pittsburgh Post-Gazette is asking the U.S. District Court to dismiss generic drugmaker Mylan's complaint against it, saying it had a constitutional right to publish an article that led to an investigation by the Food and Drug Administration.

The Pittsburgh Post-Gazette claims the only reason Mylan filed the lawsuit Aug. 19 in West Virginia's Monongalia Circuit Court against PG Publishing Company dba Pittsburgh Post-Gazette, reporters Patricia Sabatini and Len Boselovic and three John Does was to obtain confidential sources used in the story.

Mylan's suit says a July 26 Post-Gazette story about Mylan's Morgantown plant titled "Mylan workers overrode drug quality controls" written by Sabatini and Boselovic was based primarily on a "confidential internal report" that was wrongfully obtained and mischaracterized. Mylan believes the defendants have other confidential materials that are protected both by attorney-client and work product privilege "and are so labeled in bold type."

The July 26 article revealed the outcome of an internal investigation conducted by Mylan. In the investigation, Mylan discovered workers at its Morgantown plant were routinely overriding computer-generated warnings about potential problems with medications they were producing, according to the article.

Mylan says facts in the article are misconstrued and that the article's publication has since affected its stock value.

"The article also contains numerous statements that adversely affect the business reputation of Mylan; impugn the integrity of its manufacturing and quality control procedures; impugn the integrity of management personnel; and thereby threaten current and prospective business relationships in the highly competitive market of generic pharmaceuticals," Mylan's suit states. It goes on to say the Post-Gazette story and follow-up articles are "sensational and misleading articles based on improperly obtained and misconstrued confidential, proprietary and/or privileged internal documents" creating the "false appearance" of quality and regulatory issues.

But the Post-Gazette and its reporters contend that all information contained in the stories were "meticulously accurate" and that they were not responsible for any drop of the company's stock.

"Any decrease in stock price or diminution in value to plaintiffs was caused, in whole or in part, by the stock market environment, financial markets, economy and/or by mismanagement of the companies and/or by actions of the companies' management and/or officers and/or by the appointment or election of specific company officers," their answer states.

Mylan's complaint says the FDA investigated Mylan after the Post-Gazette story was published, but FDA officials observed "no significant discrepancies and closed its investigation."

Reporters Sabatini and Boselovic, the suit claims, also induced Mylan employees to violate company policy and to provide confidential information to them and tried to influence Mylan employees for at least a two-month period.

However, the Post-Gazette, Sabatini and Boselovic maintain they were guilty of no wrongdoing when obtaining information used in the story. Reporters contacted Mylan employees only to corroborate information from confidential sources, they claim.

"All of its (Post-Gazette's) conduct is fully protected under well-settled legal principles under the First Amendment to the United States Constitution," the defendants' answer states. "Mylan's efforts to circumvent these principles and to impose liability on the Post-Gazette for constitutionally protected conduct is doomed to fail. This fact makes all the more evident that Mylan's suit is aimed, not at meritless efforts of holding the Post-Gazette liable, but at attempting to uncover the Post-Gazette's sources of information."

In fact, Mylan only filed a lawsuit after its efforts to discover the Post-Gazette's confidential sources failed, the defendants' answer says.

The suit should be dismissed, say the defendants, because it violates freedom of the press and protection of the public's safety.

"Defendants have a privilege to report information regarding matters that may involve important aspects of public safety and/or legitimate public interest and concern," the answer states.

Mylan seeks compensatory and exemplary damages, attorney fees, court costs and other relief.

Mylan's lawsuit also seeks, among other things, the return of the internal confidential and proprietary documents in the Post-Gazette's possession that were improperly obtained without Mylan's knowledge or consent and the revelation of sources who disbursed the information.

All people who provided the confidential report to the Post-Gazette should remain confidential, the defendants contend.

The Pittsburgh Post-Gazette has since removed the case to U.S. District Court based on diversity of jurisdiction – Mylan Pharmaceuticals is a West Virginia based company and the defendants all reside in Pennsylvania. The defendants say Mylan's residency should not matter because it merely owns Mylan Pharmaceuticals' stock, and therefore, has no standing to bring a claim for relief.

Mylan should not even be named as a plaintiff in the lawsuit because it does not own the property where the events took place, the defendants contend.

"For all purposes, MPI and Mylan, Inc. are separate persons and may not treat themselves as one entity in the context of this lawsuit," the defendants' answer states. "The Plaintiffs' artful attempt to blur these fundamental distinctions cannot change or avoid this well-settled legal rule."

In their answer, the defendants are asking for the complaint to be dismissed and are seeking costs and other relief the court deems just.

Mylan's case was filed by attorneys with the Pittsburgh law firm of Pietragallo Gordon Alfano Bosick & Raspanti.

Robert P. Fritzsimmons of Frizsimmons Law Offices in Wheeling, Holly S. Planinsic of Herndon, Morton, Herndon and Yeager in Wheeling and Fritz Byers of Toledo will be representing the defendants.

Mylan and the Post-Gazette have a history.

When Mylan announced the promotion of Heather Bresch to COO in 2007, she said she had an MBA degree from West Virginia University. The newspaper had a story later questioning the degree.

A panel later concluded that WVU officials falsified Bresch's academic records to make it seem as if she finished the degree.

"The changes included adding 22 credits and grades 'pulled from thin air' to her transcript," the Post-Gazette later reported. "Officials then awarded her a degree retroactively that she did not earn."

After the report, Bresch's degree was revoked. And WVU President Michael Garrison, the university's provost and business school dean resigned.