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Sent Via E-Mail only:

March 13, 2018

Charles Fournier, J.D.


Vice President
Type 1 Diabetes Defense Foundation
P.O. Box 10841
Eugene, Oregon 97440
Charles.fournier@t1df.org

Re: Petition for Reconsideration


OOR Dkt. AP 2018-0378
Chares Fournier v. Lehigh County

Dear Mr. Fournier:

The Office of Open Records (“OOR”) is in receipt of your Petition for Reconsideration filed
to the above-referenced docket number. A review of the appeal file indicates that your appeal was
correctly dismissed as premature.

There is nothing that prevents you from submitting another request and if necessary, filing an
appeal within the appropriate timeframe. Accordingly, we hereby deny your petition for
reconsideration.

Respectfully,

/s/ Charles Rees Brown

Charles Rees Brown


Chief Counsel

cc: Julia Boss (via e-mail only);


Sarah Murray, Esq. (via e-mail only);
Judith Johnston (via e-mail only)
P.O. Box 10841
Eugene, Oregon 97440
p/f: 541.257.8878
info@t1df.org
March 2, 2018
www.t1df.org

Office of Open Records


333 Market Street, 16th Floor
Harrisburg, PA 17101-2234

Sent via online appeal filing system at http://www.openrecords.pa.gov/Appeals/AppealForm.cfm

IN RE: Fournier v. Lehigh County: OOR Dkt 2018-0378 - Petition for Reconsideration (PFR)

To Whom It May Concern:

I am the president of the Type 1 Diabetes Defense Foundation (T1DF). I am filing this appeal on
my behalf and on behalf of T1DF. I will refer to T1DF and myself as “we” or “us” or “our” or “Boss/
T1DF.”

On February 28, 2018, we filed an appeal of Lehigh County’s response to two (2) RTKL requests
dated February 20, 2018.

Regarding the second request, we argued, inter alia, that the reply can not be construed as a
notice under Section 902 as it did not meet the substantive and procedural requirements of
Section 902(b) and that, as a result, the County failed to demonstrate entitlement to a 30-day time
extension. ‘Invocation,’ the basis for OOR’s Final Determination, is not the substantive and
procedural standard of Section 902(b). We also argued that a 3-line boilerplate notice could not
be construed as a ‘response’ within the meaning of Section 901. Consequently, the 3-line
administrative boilerplate should be construed as a deemed denial and a deemed denial gives
rise to a right of appeal.

The County has yet to respond to our first request submitted on February 10, 2018, to Lehigh
County’s senior legal counsel, Ms. Roseberry. The County’s February 20, 2017, response does not
mention our first RTKL request and our appeal does not represent that this request was received
by the County’s open records officer on February 15. We, in fact, argued that this request was
acted upon on February 14, 2018, by Lehigh County’s Law Department and thus should have
been responded to by February 15, 2017. OOR performed no investigation of this matter. OOR’s

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allegation that the February 10, 2018, request had been received by the County on February 15,
2018, is unsupported. We do not believe that it is proper for OOR to ‘reshape’ fact patterns in
order to facilitate the summary dismissal of an appeal.

OOR’s Final Determination, issued on March 1, 2018, thus contains factual inaccuracies and side-
steps the substantive content of our appeal, i.e. it accepts, without review, the County’s 3-line
administrative boilerplate as a ‘response’ to our second request for the purpose of Section 901
and as a proper request for time extension under Section 902. OOR also accepts, without review,
the 30-day extension as ‘reasonable.’ Regarding our first request, OOR finally ignores that, under
Section 902, Lehigh County’s 30-day extension should be construed as a deemed denial. For
these reasons, as further explained below, we respectfully petition OOR for reconsideration of its
Final Determination.

February 10, 2018 Request

This request has neither been acknowledged nor addressed by Lehigh County. It was, however,
acted upon by the Law Department on or before February 14, 2018, as explained in Attachment B.

The County’s February 20, 2018, response addressed our “Right To Know request of February 15,
2018” that the County received on that date, as our email was read by Ms. Johnston on that date.
This response made no reference to the February 10 Right To Know request sent to the Law
Department. The description of the request included in the County’s response, quoted verbatim
from our second February 15, 2018, request. The County’s response made no reference to Ms.
Roseberry nor to the first RTKL request we sent her on February 10, 2018.

On February 14, 2018, we received a call from a law firm regarding this first February 10, 2018,
request. As stated in the email included on pages 32-33 of Attachment B to our appeal
application, two attorneys from the law firm Bernstein Litowitz Berger & Grossmann LLP
(“BLB&G") Katie Sinderson and Adam Hollander “called [us] concerning [our] inquiry to [their]
client Lehigh County.” During that call, I reminded these attorneys that my request was made to
Lehigh County under RTKL and that it was improper for the County to inquire about my motives
via a third-party law firm that, to my knowledge, had not been appointed by the Board of
Commissioner for the purpose of handling RTKL requests.

OOR’s Final Determination issued on March 1, 2018, conflates the two requests and construed,
sua sponte, that the February 10, 2018, request had been “received by Agency Open Records

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Officer on February 15, 2018.” OOR concluded, based on this flawed fact pattern, that “Agency
timely responded on February 20, 2018.”

We actually do not know when the February 10, 2018, request was received by the County Open
Records Officer. To date, this request has not been responded to. The February 20, 2018,
response letter, mailed on February 21, 2018, does not make any reference to this February 10,
2018, request. The fact pattern upon which the Final Determination was predicated is flawed.

The March 1, 2018, Final Determination (Dkt. AP 2018—0378), as it pertains to this first February
10, 2018, request, should be vacated in its entirety. Even assuming that the February 20, 2018,
response is a proper notice under Section 902 for the purpose of our February 10, 2018, request,
the request for access should be deemed denied under Section 902(b), as the date that a
response is expected to be provided is in excess of 30 days, following the five business days
allowed for in section 901.

February 15, 2018 Request

Regarding our second request, we concede that the County’s letter was timely. We, however,
appeal it as a 3-line administrative boilerplate can’t be construed as a response within the
meaning of Section 901. It also failed to meet the substantive and procedural requirements of
Section 902. Section 902 does not allow an Agency to ‘invoke’ a 30-day time extension. The
burden to prove entitlement for a time extension and reasonableness of said time extension is on
the agency. The County’s February 20, 2018, letter failed to provide any ground for a 30-day time
extension and failed to provide any evidence that the requested information could not be
provided within 5 business days (especially knowing that the same information was requested on
February 10, 2018). The County’s mere invocation of a section number does not meet the
substantive and procedural due process requirement of Section 902 and should have been
rejected by OOR as insufficient to meet the entitlement and reasonableness requirements of
Section 902.

Section 102 defines “Response” as meaning “Access to a record or an agency’s written notice to a
requester granting, denying or partially granting and partially denying access to a record.” In
order to fulfill this definition, Section 901 requires that “an agency shall make a good faith effort to
determine if the record requested is a public record, legislative record or financial record and
whether the agency has possession, custody or control of the identified record, and to respond as

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promptly as possible under the circumstances existing at the time of the request.” The purpose of
the response is to grant or deny access, as stated under Section 904. A 3-line administrative
boilerplate that neither identifies a single document nor grants/denies access to such a record is
not a “response” as defined by Section 102. Furthermore, a 3-line boilerplate does not
demonstrate a good faith effort to identify the requested documents and thus can’t be deemed a
response for the purpose of Sections 901, 902, 903 and 904. This matter is further explained in
Attachment B. OOR’s Final Determination does not even address this first ground of appeal. It is
therefore defective and should be vacated as it pertains to the first ground of appeal to the
County’s response to our second RTKL request submitted and received on February 15, 2018.

If the County’s response is not a response under Section 901, then it must meet the notice
requirements of Section 902(b). OOR’s March 1, 2018, Final Determination should be vacated as it
relied on an ‘invocation’ standard that does not meet Section 902(b)(2)’s substantive
requirements: the County’s 3-line boilerplate failed to provide “the reason for the review [an] a
reasonable date that a response is expected to be provided.” Merely listing a section number (i.e.
30 possible different reasons) is not akin to providing the actual reason for delaying a response
owed to the requester within 5 business days, especially when the requested document should
be readily available from the Law Department’s litigation file. This matter is further explained in
Attachment B. Since Section 902(b) requires that reasons be provided, OOR’s Final Determination
should be vacated as it failed to address whether a 3-line boilerplate statement that provides no
actual reason for the review meets the substantive burden requirements of Section 902(b).

Furthermore, 30 days is not a reasonable amount of time required to obtain a response from the
Law Department which is across the hallway from the office of the County’s Open Records Officer
—it is the maximum extension an Agency can request under Section 902(b). The County’s response
made no representation regarding the reasonableness of the request for time extension, and it is
our contention that this extension is in fact unreasonable under the circumstances of this request.
Absent any attempt to argue reasonableness, the County’s blanket request for the maximum
allowable extension under Section 902(b), solely based on a 3-line boilerplate statement, does
not meet the substantive and procedural due process of RTKL and should be rejected. This matter
is further explained in Attachment B. Since the Section 902(b) standard is one of ‘reasonableness’
and not ‘invocation’ OOR’s Final Determination should be vacated as it relied on the wrong
standard.

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For the reasons stated above, the March 1, 2018, Final Determination (Dkt. AP 2018—0378), as it
pertains to our second February 15, 2018, request, should be vacated in its entirety, as it failed to
address the specific grounds of our appeal regarding the substantive content of the notice
provided by the County and applied the wrong standard regarding its entitlement to a time
extension under Section 902(b).

This application for a PFR is being filed within 15 days after the issuance of a Final Determination.
It is made by petition and states specifically the grounds relied upon in accordance with
Pennsylvania's General Rules of Administrative Practice and Procedure, 1 Pa. Code Section 35.241.

Respectfully submitted,

Julia Boss, individually and o/b/o the Type 1 Diabetes Defense Foundation
President
Type 1 Diabetes Defense Foundation

Attachements:

A. OOR Final Determination dated March 1, 2018.


B. T1DF letter to OOR dated March 1, 2018.

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P.O. Box 10841
Eugene, Oregon 97440
p/f: 541.257.8878
info@t1df.org
March 1, 2018
www.t1df.org

Office of Open Records


333 Market Street, 16th Floor
Harrisburg, PA 17101-2234

Sent via online appeal filing system at http://www.openrecords.pa.gov/Appeals/AppealForm.cfm

IN RE: Charles Fournier (T1DF) v. Lehigh County Employees Retirement System, OOR Dkt.
AP 2018-0343

To Whom It May Concern:

I am the president of the Type 1 Diabetes Defense Foundation (T1DF). I am filing this appeal on
my behalf and on behalf of T1DF. I will refer to T1DF and myself as “we” or “us” or “our” or “Boss/
T1DF.”

This letter amends the appeal we filed on February 28, 2018. It addresses our February 10, 2018,
and February 15, 2018, RTKL requests and the response issued by Lehigh County (“County”) on or
about February 21, 2018 (actual mailing date), and received by us on or about February 26, 2018.

Under §407 of Lehigh County’s Home Rule Charter (Attachment K), the County Solicitor must
receive express authorization by the Board of Commissioners to hire a law firm as outside counsel.
(Attachment K): “No other official or agency shall employ other legal counsel except as may be
permitted by law or by the Charter without the approval of the Board.” §407(a) “With the approval
of the County Executive and the Board, the County Solicitor may retain special counsel for a
particular proceeding.” §407(b)

On February 10, 2018, and February 15, 2018, we requested records documenting the above-
mentioned approval in relation to the appointment of outside counsel for a specifically identified
proceeding started on January 11, 2017, in a federal court of New Jersey. On February 20, 2018,
Lehigh County responded with a single 3-line sentence of administrative boilerplate, and thus
arbitrarily and summarily refused to promptly disclose within 5 business days, in good faith, the
requested records likely kept in the litigation file of the Law Department. Lehigh County gave no
specific reason excusing non-performance or justifying the time extension sought.

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We are therefore appealing both the County’s non-performance and the County’s failure to
provide any reason excusing non-performance. We are respectfully requesting that OOR find the
County’s administrative boilerplate response to be a deemed denial, that the County be ordered
to comply with the substantive and procedural due process requirements of the Right To Know
Law (RTKL) and that the County be ordered immediately to make a good faith effort to produce
promptly all records, responsive to our request, that are not subject to a specific exception.

PROCEDURAL HISTORY

On February 10, 2018, we first reached out to Lehigh County’s senior legal counsel Catharine
Roseberry via LinkedIn. In March 2017, Ms. Roseberry had signed a declaration in In re Novo
Nordisk Securities Litigation, Case No. Case 3:17-cv-00209 (BRM) (LHG)—a putative securities class
action initially filed on January 11, 2017 by by the law firm BERNSTEIN LITOWITZ BERGER &
GROSSMANN LLP (1251 Avenue of the Americas New York, New York 10020) (“BLBG”)
supposedly as Counsel for Plaintiff Lehigh County Employees’ Retirement System. This securities
lawsuit, filed in New Jersey federal district court, was identified as Lehigh County Employees’
Retirement System v. Novo Nordisk. We requested the records authorizing BLBG to file this lawsuit.
We did not hear back from Ms. Roseberry, and we did not receive a response from the County
regarding this inquiry.

On February 14, 2018, a partner with BLBG called Charles Fournier, T1DF’s director of legal
advocacy, regarding the February 10, 2018, request. Ms. Sinderson inquired during that call
regarding the motive for requesting County records pertaining to appointment of outside
counsel.1 Ms. Roseberry had apparently forwarded our request to a third party; she might also
have forwarded it to the County’s Open Records Officer as required under RTKL. Although Ms.
Roseberry apparently had time to consult with outside counsel regarding this RTKL request and
outside counsel had time to inquire as to our motives for filing this TRKL, the County did not have
time to actually respond to our request in compliance with its disclosure duties under RTKL.

1 It is our contention that the County’s outreach to this law firm regarding our RTKL request might have been
improper since BLBG has not been appointed outside counsel for the purpose of advising the County on RTKL
requests. We reserve our rights to bring related claims against the County, Ms. Roseberry and BLBG in relation to
this matter.

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On February 15, 2018, we filed a second formal request for records with the Open Records
Officer of Lehigh County, Pennsylvania (Attachment A). In addition to the request form
(Attachment B), we attached three additional documents: the securities lawsuit filed on behalf of
Lehigh County Employees’ Retirement System or “Plan” (for reference), a screenshot of the above
mentioned request previously made on February 10, 2018 (superseded by this formal request)
and an email to a law firm regarding a phone call we received on February 14, 2018, regarding
this prior request.

The purpose of this request is to obtain the official records documenting the appointment of
outside counsel and other authorizations required for the filing of a lawsuit on behalf of Lehigh
County Employees’ Retirement System and related disclosure of confidential Plan information.

On or about January 11, 2017, a securities lawsuit was filed by James Cecchi, an attorney with the
law firm CARELLA, BYRNE, CECCHI, OLSTEIN, BRODY & AGNELLO, P.C. (5 Becker Farm Road
Roseland, New Jersey 07068) supposedly as Liaison Counsel for Plaintiff Lehigh County
Employees’ Retirement System, and by the law firm BERNSTEIN LITOWITZ BERGER &
GROSSMANN LLP (1251 Avenue of the Americas New York, New York 10020) (“BLBG”)
supposedly as Counsel for Plaintiff Lehigh County Employees’ Retirement System. This securities
lawsuit, filed in New Jersey federal district court, is identified as Lehigh County Employees’
Retirement System v. Novo Nordisk, Case No. Case 3:17-cv-00209 (BRM) (LHG).

Under §407 of Lehigh County’s Home Rule Charter, the County Solicitor must receive
authorization by the Board of Commissioners to hire a law firm as outside counsel (Attachment K):
“No other official or agency shall employ other legal counsel except as may be permitted by law
or by the Charter without the approval of the Board.” §407(a). “With the approval of the County
Executive and the Board, the County Solicitor may retain special counsel for a particular
proceeding.” §407(b). County records documenting the decision to proceed with this lawsuit and
the appointment of outside counsel2 could be in the custody of four (4) departments/agencies:

1. Board of County Commissioners;


2. Office of the Lehigh County Controller;
3. Department of Law/County Solicitor; and

2 We are not seeking confidential documents protected under the attorney work-product or attorney-client
privileges. The documents we are requesting are public records documenting the decision to proceed with the
lawsuit and the appointment of counsel.

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4. Retirement Board of the Lehigh County Employees' Retirement System (Retirement System,
Pension Plan, or Plan).

We researched all meeting minutes and public records available for these covered agencies via
the websites of Lehigh County’s agencies and departments for the period between November
2015 and March 2017. We could not find any public record referring to this lawsuit, authorizing
the start of this lawsuit, appointing outside legal counsel to file such a lawsuit or authorizing the
disclosure of confidential Plan investment information. We therefore submitted five (5) requests
for records, one request for each department/agency plus a fifth request addressing the
possibility that these matters were discussed during closed-door executive meetings.

The type of records sought are records usually and customarily produced by covered agencies to
document the usual performance of their public duties in compliance with local and State laws.
For example, the Oklahoma Firefighters Pension and Retirement Board met January 20, 2017, to
discuss the above-mentioned lawsuit and related appointment of outside counsel (see
Attachment D, item 9(a) on page 4).

As required under the County’s Home Rule Charter, formal authorization is required and thus
should be documented. At a minimum, the official records authorizing the Law Department to
proceed with this lawsuit and related appointment of outside counsel should be kept in the
litigation files maintained by the County Solicitor. Lehigh County’s Law Department, a covered
agency subject to RTKL, does not have the authority to file ‘secret’ price fixing lawsuits against
international pharmaceutical companies.

On Thursday, February 15, 2018, the request form (and its attachments) we emailed was read at
3:56:35 pm EST by Judith Johnston (JudithJohnston@lehighcounty.org). Ms. Johnston is the
County’s Public Information Officer. See: http://www.openrecords.pa.gov/Documents/RTKL/
AORO_List-County_Municipal.pdf. Lehigh County, its Law Department, its Board of
Commissioners, its Office of the Controller, the Lehigh County Employees’ Retirement System
(Retirement System, Pension Plan, or Plan) and its Board had 5 days to produce all or part of the
requested documents. As stated above, most of these documents should be kept by the Law
Department in its litigation files.

On or about February 20, 2018, Ms. Johnston drafted Lehigh County’s response. The letter was
effectively mailed on February 21, 2018 (see Attachment E). The County thus responded after

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fewer than 2.5 business days. The response did not include any documents. The full substantive
response consisted entirely of administrative boilerplate, stating merely that:

“Please be advised that I am reviewing your request, pursuant to and in and accordance
with Section 102, 708 and 902 (a) (1), (2), (4), (7) of the Pennsylvania Right to Know Law, and
how long it will take to produce the requested material in the event it is a public record and
not subject to one of the enumerated exception set forth in the Right To Know Law. I will
provide you with a written response, approving or denying your request, or will be
permitted to review the requested materials on or before March 26, 2018.”

The County’s letter made no reference to the February 10, 2018, request directly made to the
County’s Law Department via its senior legal counsel, Ms. Roseberry, and to the actions taken by
the County Law Department in response to this request. The County did not avail itself to the full 5
business days allowed under RTKL to promptly identify and produce requested records and did
not substantiate its need for a reasonable time extension.

On February 23, 2018, we filed a first appeal (see above-referenced docket number) with OOR
for deemed denial as we expected to receive an answer via email on or before February 22, 2018.
OOR correctly determined that the appeal was premature solely based on the date the appeal
was filed (the County had the option to respond via mail, as it actually did). OOR did not review
the County’s response.

On February 26, 2018, we received the above-mentioned response from Lehigh County. We
deemed this document a non-response, i.e. a deemed denial. The County should and could have
produced non-privileged records responsive to our request or at a minimum an affidavit clarifying
whether responsive records actually exist. The County and the Law Department had advance
notice since February 10, 2018, and apparently had time to discuss this matter with outside legal
counsel on or before February 14, 2018. The 3-line administrative boilerplate response drafted on
February 20, 2018, is therefore akin to a non-response, issued in bad faith and in breach of the
substantive and procedural due process of RTKL.

On February 27, 2018, we filed this appeal of the County’s deemed denial with OOR, as amended
with the present letter.

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SUMMARY OF APPEAL

The County failed to respond in compliance with the substantive and due process requirements
of Section 901 and 902 of Pennsylvania’s Right To Know Law (“RTKL”). The County did not avail
itself to the full 5 business days allowed under RTKL to promptly identify and produce requested
records and did not substantiate its need for a reasonable time extension. The County’s ‘non-
response’ response was issued in bad faith, despite a de facto 5-day advance notice provided on
February 10, 2018, to the Law Department.

We are therefore appealing Lehigh County’s refusal to promptly identify and produce, in good
faith, part or all of the requested documents and its inadequate reliance on administrative
boilerplate, i.e. an enumeration of clauses without any substantiation, for justifying the above
mentioned breach and seeking an unjustified 30-day time extension—when at least part of the
records sought by this request should be readily available.

Our appeal broadly relies on two decisions, Dep’t of Corr. v. Fiorillo, 2017 Pa. Commw. Unpub.
LEXIS 305 (addressing the test for privileged documents) (Attachment F) and Office of the
Governor v. Donahue and OOR, 98 A.3d 1223 (Pa. 2014) (addressing an agency’s time frame for
responding to written requests for documents) (Attachment G). Other decisions from Pennsylvania
courts and OOR apply.

We respectfully request that OOR:

(A) find Lehigh County in breach of its duty to promptly disclose, in good faith, responsive records
within five (5) business days under Pennsylvania’s Right to Know Laws, and

(B) order the County and its agencies

(1) to immediately identify and disclose all available public records responsive to the request
and not subject to a specific exception, and,

(2) if any specific records fall under an enumerated exception, (a) identity the document with
specificity, (b) provide a substantive rationale for the presumption of privilege, identifying
the specific exemption the County relies upon for withholding release of that specific
document, and (c) provide a schedule for the final decision regarding the release of each
of these documents.

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(3) or, in the alternative, issue an affidavit documenting that no record responsive to the above
requests actually exists.

BASIS OF APPEAL

The County’s administrative boilerplate, issued after only a one-day review, breached Section
901 (good faith effort, prompt disclosure) and 902 (reasons, reasonable date)

Lehigh County, its Law Department, its Board of Commissioners, its Office of the Controller, the
Lehigh County Employees’ Retirement System (Retirement System, Pension Plan, or Plan) and its
board are covered agencies. A covered agency is required to respond to a request as promptly as
possible under the circumstances, which shall not exceed five business days—not 5 business days
plus 30 days as declared in Lehigh County’s response.

Section 901 requires that the agency respond within 5 business days unless one of the specific
grounds stated under Section 901(a) is shown to apply to a specific document or information.
Furthermore, Section 902(b)(2) requires that the notice include the reason for the review and a
reasonable date that a response is expected to be provided if it can not be provided within the
mandated 5 business days. As described above, Lehigh County provided no reason for the
extended review and made no determination as to the basis for the stated de facto 30-day time
extension. Ms. Johnston’s response treats the 30-day extension as the time for response, thus
making a joke of the 5 business days stipulated in Section 901. The County thus turns the RTK
framework on its head, treating the time extension as a right that does not need to be
substantively justified, i.e. a mandate to delay and obfuscate disclosure—and thus unduly delay the
requesters’ right to appeal. The delaying actions of the County should instead be considered a
deemed denial in order to restore the integrity of the RTKL framework.

As discussed in Attachment G, §901 addresses an agency’s time frame for responding to written
requests for documents made pursuant to the Right-to-Know Law. Pursuant to §901, an agency
must respond to a Right-to-Know Law records request within five business days of receipt of the
request by the agency’s respective open-records officer. Section 901 of the RTKL directs agencies
to make a good faith effort to respond as promptly as possible, and in any event to respond no
later than “five business days from the date the written request is received by the open-records
officer for an agency.” Section 901 provides more fully:

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Upon receipt of a written request for access to a record, an agency shall make a good faith
effort . . . to respond as promptly as possible under the circumstances existing at the time
of the request . . . . The time for response shall not exceed five business days from the date
the written request is received by the open-records officer for an agency. If the agency fails
to send the response within five business days of receipt of the written request for access,
the written request for access shall be deemed denied. (emphasis added).

Courts have found the language of this passage to be clear and unambiguous. Simply put,
agencies must respond to RTKL record requests within five business days after the agencies’
respective open-records officer first receives the request. The five business day period plainly
begins when the open-records officer receives a request (Appeal from the Order of
Commonwealth : Court at No. 376 MD 2012 dated January 23, 2013, 27.) The question at hand is
whether a 3-line administrative boilerplate response, void of substantive content actually
addressing the request, should be deemed a valid response for the purpose of Section 901. We
believe it is not as doing so would negate the purpose of Section 901.

To effectuate the legislative intent for broader public access, “[C]ourts should liberally construe
the RTKL, to effectuate its purpose of promoting ‘access to official government information in
order to prohibit secrets, scrutinize actions of public officials, and make public officials
accountable for their actions.’” Allegheny County Department of Administrative Services v. A
Second Chance, Inc., 13 A.3d 1025, 1034 (Pa. Cmwlth. 2011) (citation omitted).

OOR has previously argued that the Commonwealth Court adopted an overly narrow
interpretation of Section 901, specifically with regard to the language from Section 901 that reads:
“[t]he time for respon[ding to a records request] shall not exceed five business days from the date
the written request is received by the open-records officer for an agency.” Office of the Governor
v. Donahue and OOR, 98 A.3d 1223, 22 (Pa. 2014) (recital of facts). In this case, OOR contended
that an open-records officer’s duties are merely administrative while it is the agency that performs
all critical decision-making functions with respect to the RTKL, and reasons that the five business
day period for responding to a RTKL request necessarily begins to run when any agency
employee first receives the request. OOR here recognizes that a response must be substantive
and thus requires contribution from agency employees. Implicit in OOR’s argument, a mere
administrative response sent by an open-records officer without the contribution of agency
employees would not satisfy the intent and substantive requirements of RTKL. This is, however,
exactly what Lehigh County did.

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We mitigated the practical issue OOR had identified in the above-mentioned case when we de
facto gave advance notice of our request to Lehigh County’s Law Department directly on February
10, 2018. (See second to last page of Attachment B.) In this matter, the County’s Law Department,
the agency most concerned with our request and most likely to have copies of some of the
requested records, had received a similar, although much briefer, request from us five calendar
days prior to the issuance of our formal request to the County’s open-records officer. The Agency
apparently acted upon our February 10 request on or about February 14, 2018 when they
communicated with BLBG attorneys regarding this matter. The February 15, 2018, formal request
superseded this earlier request and expanded on it; it did not change its subject matter. Both the
February 10 and February 15 requests concern the same law firms, the same lawsuits and, broadly
speaking, the same records. We should therefore have received a substantive response from the
Law Department, not mere administrative boilerplate.

The County de facto already received a 5 business day time extension. It thus had 10 business
days to respond to a simple request the Law Department could have partially addressed just by
identifying the reference number and content of the litigation file pertaining to the above
mentioned lawsuit filed by BLBG, on behalf of the Plan, on January 11, 2017. 10 days is a
reasonable amount of time to ask Ms. Roseberry whether her office maintains a litigation file for
the above mentioned lawsuit filed on the behalf of the County. The practice issue identified by
OOR in Office of the Governor v. Donahue and OOR had been mitigated by our February 10,
2018, prior request. The County’s non-performance is inexcusable.

Pursuant to the plain language of Section 901 of the RTKL, Lehigh County must respond to RTKL
record requests within five business days of the request’s receipt by the agency’s open-records
officer. Office of the Governor v. Donahue and OOR, 98 A.3d 1223, 22 (Pa. 2014). Under the
circumstance of this matter, the 3-line, one sentence administrative boilerplate included in the
letter dated February 20, 2018 (Attachment E), can’t be deemed a ‘response’ pursuant to the plain
language of Section 901 and other substantive due process requirements of RTKL. It is a non-
response.

Lehigh County made no good faith effort to comply with any of the procedural and substantive
requirements of RTK laws. Despite a five day advance notice (upon which the County did act, but
not in furtherance of its duties under RTKL) and after spending a single day reviewing our request,
Lehigh County wrote a three-line administrative boilerplate reply that merely cites three section
numbers and promises some form of response in 30 days. Lehigh County does not represent that

Page 9 of 19
its circumstances at the time of the request would have prevented the County from identifying
and producing any document. Nor does the County actually represent that the request is overly
complex, vague or burdensome (and as discussed above, it is not). To further the intent and letter
of RTKL, the administrative boilerplate mailed to us on February 21, 2018, should be construed as
a ‘non-response’ and thus a deemed denial.

The County failed to provide any substantiation for not disclosing any document within 5
business days, in breach of Section 902

The County’s single-sentence, three-line administrative boilerplate should be construed as a non-


response under Section 902. If it is construed as a response, it should then be deemed a denial.

Section 902(b)(2) requires that the notice include the reason for the review. The County’s response
provided no reason whatsoever. Merely listing a Section number does not fulfill the requirements
of Section 902(b)(2), especially when the Section in question provides 30 possible reasons and
the letter does not provide any indication as to whether one of these reasons, if any, actually
applies. The County had 5 business days to attempt, in good faith, to identify, retrieve and
disclose the requested documents — or to provide reasons for not being able to do so. The
County made no good faith effort to comply with either of its duties under RTKL.

The County’s complete response was a single sentence:

“Please be advised that I am reviewing your request, pursuant to and in and accordance
with Section 102, 708 and 902(a)(1), (2), (4), (7) of the Pennsylvania Right To Know Law, and
how long it will take to produce the requested material in the event it is a public record
and not subject to one of the enumerated exceptions set forth in the Right To Know Law.”

This boilerplate response only documents the County’s bad faith. First, a review must be
conducted in accordance to and pursuant to all Sections of the RTKL, including Section 901. The
County is obviously not entitled to pick and chose which section applies. Second, this single
sentence failed to identify any basis excusing non-performance and for justifying the 30 business
day delay it de facto requested. We are left guessing as to what the County’s reason might be for
responding after a single day and for not identifying any responsive records. We therefore reject

Page 10 of 19
this request for time extension, made in bad faith, and request immediate performance as
mandated by RTKL.

The RTKL are remedial in nature and were “designed to promote access to official government
information in order to prohibit secrets, scrutinize the actions of public officials, and make public
officials accountable for their actions,” Pennsylvania State Police v. McGill, 83 A.3d 476, 479 (Pa.
Cmwlth. 2014). In evaluating whether a record is exempt from disclosure, the exemptions must be
narrowly construed so as not to frustrate the RTKL’s remedial purpose, Office of Governor v.
Scolforo, 65 A.3d at 1100 (Pa. Cmwlth. 2013). However, mere conclusory statements alone, or in
this case, mere administrative boilerplate listing RTKL Section numbers, can not satisfy the
substantive due process requirement of RTKL, including the burden of proof an agency must
sustain to show that a request may be delayed or that a requester may be denied access to
records. See, e.g., Dep’t of Corr. v. Fiorillo, 2017 Pa. Commw. Unpub. LEXIS 305, 5 citing McGowan
v. Pa. Dep’t of Envtl. Prot., 103 A.3d 374, 381 (Pa. Cmwlth. 2014); Heavens v. Pa. Dep’t of Envtl. Prot.,
65 A.3d 1069, 1074 (Pa. Cmwlth. 2013). In the present case, the County did not even produce any
affidavits that provide justification for any claimed reasons excusing non-performance of the
prompt disclosure requirements of Section 901.

More specifically:

Section 102 provides definitions. Ms. Johnston’s specific reference to this Section as a basis for
withholding release of all requested documents is, at best, confusing. We are therefore broadly
and generally rejecting Section 102 as a Section providing any substantive ground for
withholding the requested documents.

Section 708 (b) provides approximately 30 different grounds for exemption from disclosure. The
boilerplate response we received from Ms. Johnston does not identify any specific ground among
these 30 possible exceptions that would excuse the County from disclosing the requested
documents within 5 business days. The County must make a good faith effort to disclose the
requested documents or, at a minimum, to provide actual reasons excusing its nonperformance.
In the present case, we are left guessing as to what these reasons might be. Ms. Johnston has
made no determination that a specific exception actually applies to any specific record or records.
She merely listed the section numbers en bloc. Her response does not actually state that any
requested record is not subject to access. Listing the Section numbers is not a basis for denying
access to all records.

Page 11 of 19
Under 708 (a), there is a rebuttable presumption that all records held by local agencies are public.
Under Section 305(a), there is a presumption that all records (as defined by RTKL) in the
possession of a covered agency are public records unless: (1) the record is exempt under Section
708; (2) the record is protected by a privilege; or (3) the record is exempt from disclosure under
any other federal or state law or regulation or judicial order or decree. 65 P.S. § 67.305(a). The
burden falls on the covered agency to prove, by a preponderance of the evidence, that the record
is exempt from disclosure. Section 708(a)(1) of the RTKL, 65 P.S. § 67.708(a)(1). See Dep’t of Corr.
v. Fiorillo, 2017 Pa. Commw. Unpub. LEXIS 305, 4.

The burden of proving that a record is non-public, that an exemption applies or that a specific
reason excuses non-disclosure within 5 business days is on the agency denying access. When
doing so, the County must meet all the required elements, not some. See, e.g., Dep’t of Corr. v.
Fiorillo, 2017 Pa. Commw. Unpub. LEXIS 305, 6, citing Pa. Dep’t of Educ. v. Bagwell, 114 A.3d 1113,
1123 (Pa. Cmwlth. 2015) (stating that the inability to establish any of the three elements required
to assert an exemption bars application of the exemption).

The County’s response, comprising a single sentence, obviously failed to meet these procedural
and substantive due process requirements. Lehigh County is de facto denying access beyond the
mandatory five (5) business days without providing any ground for such denial. Some of the
requested records might fall under a listed exception, in which case the County will have to meet
its substantive due process requirements. Most records responsive to this request should not fall
under any of the listed exceptions.

We are requesting proof that the required authorization and delegation have been duly given by
competent authorities, and that outside counsel has been appointed in compliance with Lehigh
County’s Home Rule Charter and applicable public procurement regulations. An example of a
record that would have been responsive to our request has been provided as Attachment D.

No exemption from disclosure exists under federal or state law for most of the requested
documents. We are not asking for drafts or records reflecting internal, predecisional deliberations
of county agencies, correspondence or bid/proposal documents, etc. Most of the requested
records should not be internal, predecisional deliberations (although some might). Most of the
records we are seeking should not be protected by attorney-client privilege (although some
might): these records contain factual information regarding the mere existence of an appointment
of outside counsel and its circumstances (see Attachment D for an example of such a factual

Page 12 of 19
record that is not subject to a privilege). Appointments of legal counsel are not “confidential
deliberations of law or policymaking, reflecting opinions, recommendations or advice.” The
attached meeting minutes of Lehigh County’s Board of Commissioners (Attachment I) document
that appointment of outside counsel is a general business matter discussed during public
meetings.

We are not requesting factual information that may reflect the deliberative process leading to that
appointment, although some of the records responsive to our request might reflect that
deliberative process (these should be identified). We are just seeking factual information related
to the existence of appointment of outside counsel for the purpose of filing a specific lawsuit.
Similarly, we are not requesting any document subsequently issued in the course of the legal
representation itself—if such a client-attorney relationship was ever established. Since usual
business of the agencies is subject to public scrutiny, there is no presumption of privilege
regarding usual business decisions. And even in the case that an appointment was made during a
closed-door meeting, the presumption is still in favor of disclosure unless the County
demonstrates the existence of a privilege. This would be a departure from the County’s standard
business procedure. Professional Services Agreements for legal services are documented during
public meetings. See, e.g. the appointment of Stevens & Lee, P.C., a full-service law firm, as
outside counsel as documented in the January 25, 2016, meeting minutes of Lehigh County (page
3) (Attachment I) Pursuant to Section 407(b) of Lehigh County’s Home Rule Charter (Attachment
K), the County Solicitor must receive express authorization by the Board of Commissioners to hire
a law firm as outside counsel. Similarly, the appointment of the above-mentioned law firms in
relation to the securities case filed on January 11, 2017, should have been authorized by the
Board, and such an authorization should have been memorialized in the form of a written record.

Some of the requested documents might also be protected from disclosure due to a legal
privilege under either attorney-client or work product doctrine. The public nature of the County’s
board meeting would de facto waive such a privilege. And the broad mandate towards disclosure
of RTKL would require that any privilege be narrowly applied. A retainer agreement between the
County and outside counsel is not attorney work product as it does not (or should not) contain
legal advice of any nature. Similarly, the existence of an appointment and the delegation of
authority required under the County Home Charter Rules to effect such an appointment pre-dates
the formation of a client-attorney relationship and thus would typically only involve
correspondence and records between County entities and/or employees.

Page 13 of 19
“The attorney-client privilege protects only those who are seeking legal advice; it ‘does not extend
to business advice or protect clients from factual investigations.’” California University of Pa. v.
Schackner, 2017 Pa. Commw. LEXIS 617, 13. But where an agency fears that attempting to meet
any other disclosure/evidentiary requirement might tend to disclose aspects of privileged
communication, privileged work product, potential litigation or legal strategy, in camera review by
OOR is an alternative to risking such disclosure by submitting evidence. Id, 15-16. Despite the fact
that the County had 10 days to review the content of a single litigation file, no record potentially
subject to a privilege has been specifically identified and no request for in camera review has
been made.

Ms. Johnston has made no determination that a specific exception actually applies to any specific
record or records. She merely listed the section numbers en bloc. Her response does not actually
state that any requested record is not subject to access. Listing the Section numbers is not a basis
for denying access to all records.

Section 902(a)(1) states that the “agency shall determine if… the request for access requires
redaction of a record in accordance with section 706.” But Section 706 states that “the agency’s
response shall grant access to the information which is subject to access… The agency may not
deny access to the record if the information which is not subject to access is able to be redacted.”
Ms. Johnston has made no such determination. She merely listed the section number. Her
response does not actually state that any of the requested records contain information which is
not subject to access. Listing the Section number is not a basis for denying access to all records.

Section 902(a)(2) states that “agency shall determine if… the request for access requires the
retrieval of a record stored in a remote location.” Ms. Johnston has made no such determination.
The County’s response does not identify any document stored in a remote location. The above
mentioned lawsuit is an ongoing matter. It was filed about a year ago. It is unlikely that the
litigation file for this matter has been archived, and the Law Department isn’t a ‘remote location.’ It
is located in the same building as Ms. Johnston’s office. Ms. Johnston’s response merely lists this
section number. Should a document be stored in a remote location, a fact the County has not
even alleged, this determination would only delay access to that specific document. Listing the
Section number is not a basis for denying access to all records.

Section 902(a)(4) states that “agency shall determine if… a legal review is necessary to determine
whether the record is a record subject to access.” Ms. Johnston has made no such determination.

Page 14 of 19
The County’s response does not identify any document requiring a legal review. Ms. Johnston’s
response merely lists this section number. Should a specific document require legal review, a fact
the County has not even alleged, this determination would only delay access to that specific
document. Listing the Section number is not a basis for denying access to all records.

Furthermore, we provided an example of the kind of document that would be responsive to our
request (Attachment D). Meeting minutes are not attorney work product subject to a privilege—
they are County management documents. County meetings are open to the public; there is no
expectation of privilege or confidentiality. Furthermore, we are only asking for proof that the
above-mentioned law firm and County officials who retained them had actual authority to file a
lawsuit. This inquiry focuses on the transactional aspect of appointment of outside counsel, not
attorney work product. We do expect that some of the requested documents/records will need
legal review and might also need redaction. But the County made no good faith effort to identify
these documents and, as required under 65 P.S. § 67.901, to promptly disclose the documents not
subject to legal review.

Section 902(a)(7) states that “agency shall determine if… the extent or nature of the request
precludes a response within the required time period” (5 business days). Ms. Johnston has made
no such determination and responded after only 2.5 business days. The County’s response does
not identify any basis for delaying access to all documents based on the nature of the request,
and we believe that our request could in fact have been at least partially addressed within the
allotted time. Ms. Johnston had only to contact Ms. Roseberry regarding the existence of a
litigation file for the above-mentioned lawsuit.

Our request pertains to a specific requirement under the County Home Rule Charter — the
requirement that the County Solicitor seek authorization to appoint outside counsel for the
purpose of filing a lawsuit. The Law Department is the only covered agency authorized to appoint
outside or special counsel (although other covered agencies might be involved, as the litigation in
question required disclosure of certain confidential investment data from the Plan). In our request,
we thus “identify or describe the records sought with sufficient specificity to enable the agency to
ascertain which records are being requested” (Section 703 of the RTKL). Our request is not open-
ended, burdensome, or overly broad (“[a]n open-ended request that gives an agency little
guidance regarding what to look for may be so burdensome that it will be considered overly
broad” Pa. Dep’t of Educ. v. Pittsburgh Post-Gazette, 119 A.3d 1121, 4 (Pa. Commw. Ct. 2015)).

Page 15 of 19
Our request meets the three-part balancing test set by Pennsylvania courts. See, e.g., Id at 4 (citing
Carey v. Dep’t of Corr., 61 A.3d 367, 372 (Pa. Cmwlth. 2013)):

1. The subject matter of our request identifies the “transaction or activity” of the agency for
which the record is sought (appointment of BLBG for the purpose of filing a specific
lawsuit actually filed on January 11, 2017, in N.J. Federal Court).

2. The scope of our request identifies “a discrete group of documents” by recipient. We are
seeking records related to an authorization that should have been provided by the County
Board of Commissioners, according to the County Home Rule Charter. The records we are
seeking are typically meeting minutes (See, e.g., Attachments D, I, J). We identified the 5
covered agencies that might have a copy of these records. It is quite easy to assess
whether a record is or is not related to appointment of legal counsel to file a securities
lawsuit against Novo Nordisk, AG. The County’s Home Rule Charter also specifically
identifies a type of responsive document under §407.

3. Finally, we provided a timeframe by virtue of identifying the date of transaction that gave
rise to the request (the January 11, 2017, filing of a securities lawsuit). Due to the secrecy
surrounding this matter, it is impossible to assess whether the requested records could
have been issued at a specific date prior to January 2017. “The timeframe prong is,
however, the most fluid of the three prongs, and whether or not the request’s timeframe is
narrow enough is generally dependent upon the specificity of the request’s subject matter
and scope.” Pa. Dep’t of Educ. v. Pittsburgh Post-Gazette, at 6. As stated in our request,
page 4: “We have checked all board meeting minutes of the Retirement Board and Board
of County Commissioners in 2015, 2016 and 2017 and could not find any reference to the
above matter. We are therefore not able to provide a more specific description of the
County records we are seeking.” Our request thus suggests a timeframe. The Authorization
to seek outside counsel might have been issued up to a year prior to the actual filing,
although in this case is could have been much closer to the filing date, or possibly in the
preceding months. But due to the County’s secrecy regarding this matter, we could not
provide a more finite description. Our failure to identify a finite timeframe does not,
however, render our otherwise sufficiently specific request overbroad (Id at 7).

All or most of the requested documents should be centrally archived in the litigation file of the
Law Department — the only covered agency authorized to appoint outside/legal counsel. An initial

Page 16 of 19
step towards satisfying the good faith requirement of RTKL would have been to identify the
litigation file reference number, review the contents of such file for responsive, non-privileged
documents such as the Board’s authorization to proceed with said appointment of special
counsel, and then to inform us whether the content of such file is responsive to our request.

Even if this request were slightly more complex, Ms. Johnston would still have to determine with
some specificity that she does not have the physical and staffing capabilities to substantially
comply with it within the required 5 business days. Ms. Johnston’s three-line administrative
boilerplate response does not represent that her office has a staffing problem or that their current
workload prevents her from reviewing our request and checking with Ms. Roseberry, senior legal
counsel with the County Law Department, whether the requested records exist. Ms. Roseberry
apparently had time to contact, on or before February 14, 2018, BLBG legal staff regarding our
request. She therefore had sufficient time to comply with our RTKL request and provide Ms.
Johnston, on or before February 20, 2018, a definite answer regarding the existence, location and
nature of all or part of the requested records. In this case, the County apparently did not even
attempt to comply. Ms. Johnston issued an administrative boilerplate after a single day of review.
Ms. Johnston read our request on Thursday afternoon and drafted her response on Monday
without expending any effort in furtherance of her affirmative duty to disclose under RTKL. Listing
a few RTKL Section numbers in a 3-line boilerplate response is not a basis for denying access to all
responsive records within the required 5 business days.

Finally, it is possible that no formal authorization has actually been issued under Section 407 of
the County’s Home Rule Charter and that the Law Department proceeded with appointing outside
counsel and filing the securities lawsuit sua sponte, based on the County Solicitor’s apparent
rather than actual authority to do so. Such a determination can easily be reached by asking the
County Solicitor whether such an authorization has indeed been issued. In the event that no
record exists, the County still bears, under the RTKL, “the burden of demonstrating that it has
reasonably searched its records to establish that a record does not exist.” Borough of Paxtang v.
Hoyer, 2017 Pa. Commw. Unpub. LEXIS 145, 6 (citing Department of Labor and Industry v. Earley,
126 A.3d 355, 357 (Pa. Cmwlth. 2015)). The County made no such statement and issued no
affidavit as evidence of the non-existence of the requested records.

Page 17 of 19
The County’s administrative boilerplate should be construed as a deemed denial or the County’s
non-performance (i.e. disclosure of available records) should be construed as a denial— and
either option gives ground for this Appeal

Section 1101(a)(1) provides that, if “a written request for access to a record is denied or deemed
denied, the requester may file an appeal with the [OOR] . . . within 15 business days.” 65 P.S. §
67.1101(a)(1). “The appeal shall state the grounds upon which the requester asserts that the
record is a public record . . . and shall address any grounds stated by the agency for . . . denying
the request.” Id.

The RTKL mandate for transparency and prompt response, made in good faith, would be nullified
if the procedural and substantive requirement of RTKL could be met with a single sentence, three-
line administrative boilerplate that, despite 5 business days advance notice, fails to identify any
specific records and to state any specific ground for excusing non-performance and thus
supporting a de facto request for an additional 30-day time extension.

As required by Section 1101(a) of the RTKL, we specify in this appeal to OOR the particular
defects in an agency’s stated reasons, or absence of stated reasons, for de facto denying a RTKL
request as it pertains to documents that should have been disclosed. For the reasons stated
above, our request should be deemed denied and this appeal, filed within 15 business days of
the deemed denial, should be considered by OOR.

CONCLUSION

Absent any specific ground that would excuse the County’s non-compliance, the County’s letter
dated February 20, 2018, should be construed as a deemed denial. To accept the County’s one-
sentence administrative boilerplate as a substantive response under RTKL would make a mockery
of the RTKL requirement to respond within 5 business days. Lehigh County’s abuse of due
process, in breach of the letter but also the spirit of RTKL, should not be tolerated by OOR.

We therefore respectfully request, as stated above, that OOR find Lehigh County’s non-response
to be a deemed denial subject to appeal, that OOR reject the County’s request for time extension
until the County provides actual evidence it needs such an extension of time, and that OOR order

Page 18 of 19
prompt compliance with the substantive and procedural requirements of the Pennsylvania Right
to Know Laws.

Respectfully submitted,

Julia Boss, individually and o/b/o the Type 1 Diabetes Defense Foundation
President
Type 1 Diabetes Defense Foundation

Attachements:

A. T1DF email to Lehigh County’s Open Records Officer (forwarding our RTKL request), dated
February 15, 2018.
B. T1DF’s RTKL Request Form dated February 15, 2018.
C. Email server delivery and read confirmation dated February 15, 2018.
D. Minutes of the Oklahoma Firefighters Pension and Retirement Board’s meeting on January 20,
2017.
E. Letter from Lehigh County dated February 20, 2018.
F. Dep’t of Corr. v. Fiorillo, 2017 Pa. Commw. Unpub. LEXIS 305.
G. Office of the Governor v. Donahue and OOR, 98 A.3d 1223 (Pa. 2014).
H. NOT USED
I. Minutes of the April 23, 2014 meeting of the Lehigh County Board of Commissioners.
J. Minutes of the January 25, 2017 meeting of the Lehigh County Board of Commissioners.
K. Lehigh County Home Rule Charter.

Page 19 of 19
LEHIGH COUNTY RIGHT-TO-KNOW REQUEST FORM DATE REQUESTED: February 15, 2018

REQUEST SUBMITTED BY: E-MAIL (charles.fournier@t1df.org)

NAME OF REQUESTOR : Charles Fournier, o/b/o Type 1 Diabetes Defense Foundation


(T1DF)

STREET ADDRESS : 3059 Hendricks Hill Drive

CITY/STATE/COUNTY (Required): Eugene, OR 97403

TELEPHONE (Optional): 206 643 1479

RECORDS REQUESTED:

*Provide as much specific detail as possible so the agency can identify the information.

This request concerns the records of four agencies:

(1) Board of County Commissioners;


(2) Office of the Lehigh County Controller;
(3) Department of Law / County Solicitor; and
(4) Retirement Board of the Lehigh County Employees' Retirement System (Retirement
System, Pension Plan, or Plan).

The purpose of this request is to obtain the official records documenting the appoint of
outside counsel and other authorizations required for the filling of a lawsuit on behalf of
Lehigh County Employees’ Retirement System and related disclosure of confidential Plan
information.

Page 1 of 4
On or about January 11, 2017, a securities lawsuit was filed by James Cecchi, CARELLA,
BYRNE, CECCHI, OLSTEIN, BRODY & AGNELLO, P.C. (5 Becker Farm Road Roseland, New
Jersey 07068) as Liaison Counsel for Plaintiff Lehigh County Employees’ Retirement System
and by BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP (1251 Avenue of the Americas
New York, New York 10020) as Counsel for Plaintiff Lehigh County Employees’ Retirement
System. This securities lawsuit, filed in New Jersey federal district court is identified as Lehigh
County Employees’ Retirement System vs. Novo Nordisk, Case No. Case 3:17-cv-00209 (BRM)
(LHG).

When the request below refers to ‘outside counsel,’ that means either or both of the above-
mentioned law firms. When the request below refers to ‘lawsuit,’ that means all the tasks
required for the preparation and filing of the lawsuit as well as the law suit that was ultimately
filed on January 11, 2017, in New Jersey Federal District Court as Lehigh County Employees’
Retirement System vs. Novo Nordisk, Case No. Case 3:17-cv-00209 (BRM)(LHG).

A certification was signed by Matthew R. Sorrentino, County Solicitor of Lehigh County, on


behalf of Lehigh County Employees’ Retirement System (“Lehigh County”) on January 10,
2017 (attached). This certificate does not clarify whether Mr. Sorrentino had actual authority
on January 10, 2017, to bind Lehigh County and whether the above-mentioned law firms
have been duly appointed as outside counsel and this action authorized by an act of the
County’s agencies that has oversight authority over this matter — Board of County
Commissioner, Retirement Board, Office of the Controller, and Law Department.

The purpose of this request is to obtain a copy of the written acts and documents of Lehigh
County that authorized appointment of BERNSTEIN LITOWITZ BERGER & GROSSMANN as
outside counsel of Lehigh County for the purpose of filing a securities class action against
Novo Nordisk as well as the acts/documents authorizing disclosure of confidential Plan
information. This lawsuit engages Lehigh County and Lehigh County Employees’ Retirement
System and required disclosure of confidential investment information to third parties that are
not County employees.

Under the Lehigh County Home Rule Charter (as amended) and the County Pension Law of
1971 (governing the operation of a retirement system for county employees), the Lehigh
County Retirement System is administered by a Retirement Board comprising of 7 members,
including the Controller and the County Executive. The Retirement Board—not the County
Commissioners, Controller or Solicitor—has plenary management and oversight authority
over the Plan, including the filing of securities lawsuits on the behalf of the Plan. These
matters should have therefore been documented and formally authorized by the Retirement
Board and Lehigh County.

Page 2 of 4
This request comprises of the following 5 requests:

• Request No. 1: Copy of the Board of County Commissioners’ minutes or decision that
allows the appointment of outside counsel and authorization to file a class action lawsuit on
behalf of Lehigh County. The Board of County Commissioners should have authorized
appointment of outside counsel and delegated the required authority to Mr. Sorrentino to
file this lawsuit and sign the complaint certification.

• Request No. 2: Copy of the Retirement Board’s minutes or decision that allows the
appointment of outside counsel, authorization to file a class action lawsuit on the behalf of
the plan, and disclosure of confidential plan information. The Retirement Board of the
Lehigh County Employees' Retirement System (Retirement System, Pension Plan, or Plan)
should have authorized the disclosure of confidential plan information and the filing of the
lawsuit as it could have negative impact on the plan’s performance.

• Request No. 3: Copy of the County Controller’s authorization or any other document
related to the appointment of outside counsel, filing of a class action lawsuit on behalf of
the plan and disclosure of confidential plan information. The Office of the County Controller
has oversight responsibilities over the plan. The County Controller may also have had to
issue a formal authorization to allow the disclosure of confidential plan investment
information to third parties who are not County employees.

• Request No. 4: Copy of the above-mentioned documents held by the Department of Law
as well as the Department of Law’s document authorizing appointment of outside counsel,
filing of the above-mentioned class action and disclosure of confidential plan information.
Department of Law/County Solicitor must have sought these authorizations in order to
proceed with the appointment of outside counsel, disclosure of confidential plan
information and finally filing of a securities lawsuit that makes very serious accusations
against a large pharmaceutical corporation, thus exposing Lehigh County to possible
liabilities if these accusations of price-fixing were found to have been made in bad faith.

• Request No. 5: It is unlikely but still possible that these matters were discussed during
closed-door executive meetings. If so, we are also requesting information about such
meetings including: date of these meetings, the list of parties involved in these meetings,
and a description of the non-public documents that authorized the above-mentioned
appointment of outside counsel, disclosure of confidential Plan information and filing of the
securities lawsuit against Novo Nordisk.

Page 3 of 4
T1DF is requesting a copy of the above-mentioned records. We have checked all board
meeting minutes of the Retirement Board and Board of County Commissioners in 2015, 2016
and 2017 and could not find any reference to the above matter. We are therefore not able to
provide a more specific description of the County records we are seeking.

This request is made under the Pennsylvania Right to Know Act.

The Act does not require that the request comply with a specific form. Agencies may fulfill
verbal, written or anonymous verbal or written requests for access to records (Section 702).
When made directly to an public employee other than the open records officer, the
employee of an agency shall forward the request for records to the open-records officer
(703).

On February 10, 2018, we forwarded, in writing, via Linkedin Inmail, a similar request to
Catharine Roseberry, Senior Legal Counsel at Lehigh County (attached). Ms. Roseberry did
not apparently comply with the Act. She forwarded our request to the law firm BERNSTEIN
LITOWITZ BERGER & GROSSMANN. This law firm contacted us directly and inquired
regarding this request without actual or apparent authority, from Lehigh County, to interfere
with a right-to-know request made to a Lehigh County Employee. T1DF may address this
breach of the Pennsylvania Right to Know Act under separate copy.

DO YOU WANT COPIES? YES

DO YOU WANT TO INSPECT THE RECORDS? (TBD after disclosure)

DO YOU WANT CERTIFIED COPIES OF RECORDS? NO


____________________________________________________________________________

RIGHT TO KNOW OFFICER:

DATE RECEIVED BY THE AGENCY:

AGENCY FIVE (5)-DAY RESPONSE DUE:

**Public bodies may fill anonymous verbal or written requests. If the requestor wishes to pursue the relief and
remedies provided for in this Act, the request must be in writing. (Section 702.) Written requests need not include an
explanation why information is sought or the intended use of the information unless otherwise required by law.
(Section 703.)

Page 4 of 4
Case 3:17-cv-00209-BRM-LHG Document 1 Filed 01/11/17 Page 1 of 24 PageID: 1

James E. Cecchi Gerald H. Silk


CARELLA, BYRNE, CECCHI, Hannah Ross
OLSTEIN, BRODY & AGNELLO, P.C. Avi Josefson
5 Becker Farm Road BERNSTEIN LITOWITZ BERGER
Roseland, New Jersey 07068 & GROSSMANN LLP
Telephone: (973) 994-1700 1251 Avenue of the Americas
New York, New York 10020
Liaison Counsel for Plaintiff Lehigh County Telephone: (212) 554-1400
Employees’ Retirement System
Counsel for Plaintiff Lehigh County Employees’
Retirement System

UNITED STATES DISTRICT COURT


DISTRICT OF NEW JERSEY

LEHIGH COUNTY EMPLOYEES’ Civil Action No.


RETIREMENT SYSTEM, on behalf of itself and
all others similarly situated,

Plaintiff,

v. COMPLAINT and DEMAND FOR


JURY TRIAL
NOVO NORDISK A/S, LARS REBIEN
SØRENSEN, and JESPER BRANDGAARD,

Defendants.

Plaintiff Lehigh County Employees’ Retirement System (“Plaintiff”), by and through its

counsel, alleges the following upon information and belief, except as to those allegations

concerning Plaintiff, which are alleged upon personal knowledge. Plaintiff’s information and

belief is based upon, inter alia, counsel’s investigation, which includes review and analysis of:

(a) regulatory filings made by Novo Nordisk A/S (“Novo Nordisk” or the “Company”) with the

United States Securities and Exchange Commission (“SEC”); (b) press releases and media

reports issued by and disseminated by the Company; (c) analyst reports concerning Novo

Nordisk; and (d) other public information regarding the Company.


Case 3:17-cv-00209-BRM-LHG Document 1 Filed 01/11/17 Page 2 of 24 PageID: 2

INTRODUCTION

1. This federal securities class action is brought on behalf of all those that purchased

Novo Nordisk American Depositary Receipts (“ADRs”) between April 30, 2015 and October 27,

2016, inclusive (the “Class Period”). The claims asserted herein are alleged against Novo

Nordisk and certain of the Company’s senior executives (collectively, “Defendants”), and arise

under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and

Rule 10b-5 promulgated thereunder.

2. Novo Nordisk is a pharmaceutical company focused on producing insulin and

other diabetes treatments. Other than Novo Nordisk, only a few other companies manufacture

insulin-based medicines, with the main players being Sanofi, Eli Lilly and Merck. To capitalize

on their dominant position in the market, the Company, together with Sanofi, Eli Lilly and

Merck, entered into a collusive agreement to increase the prices of their insulin drugs. Indeed,

the prices of these firms’ insulin products skyrocketed over the past decade in a suspiciously

close and synchronized manner.

3. Throughout the Class Period, Defendants reported impressive revenue, operating

profit growth and sales growth. In addition, Novo Nordisk told investors that the Company

would achieve sales and operating profit growth of between 5% and 9% in 2016, as well as 10%

operating profit growth over the long-term. Further, while certain of Novo Nordisk’s

competitors acknowledged that revenue from their insulin franchises would dwindle given the

increased pricing pressures from pharmacy benefit managers (“PBMs”), powerful middlemen

that buy drugs on behalf of insureds and employers, Novo Nordisk assured investors otherwise.

4. These statements, and similar statements issued throughout the Class Period, were

materially false and misleading. In truth, Novo Nordisk’s reported earnings and forecasts were

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materially misleading in that they were inflated through the collusive price fixing of the

Company’s insulin drugs. The inflated financial results reported to investors concealed the true

extent of the pricing pressures the Company was experiencing in the U.S., which Novo Nordisk

was only able to conceal by engaging in collusive activity.

5. Investors began to learn the truth regarding Novo Nordisk’s business through a

series of corrective disclosures. On August 5, 2016, the Company announced disappointing

earnings for the second quarter of 2016 because, despite its scheme, Novo Nordisk was finally

unable to conceal the significant pricing pressures it was experiencing across its portfolio.

Significantly, these pricing pressures forced the Company to lower its sales and operating growth

targets for 2016. While CEO Lars Rebien Sørensen assured investors that the Company would

still be able to increase prices in certain instances and reaffirmed Novo Nordisk’s ability to grow

its operating profit at a 10% rate, this news caused the price of the Company’s ADRs to decline

from $55.20 per ADR on August 4 to $49.87 per ADR on August 5, or approximately 10%.

6. On August 8, 2016, Novo Nordisk held a Management Roundtable discussion in

London to provide more details into the Company’s business and pricing strategy. According to

an analyst report issued by Kepler Cheuvreux on August 9 that summarized the Management

Roundtable, the reality is that major net pricing upgrades in the U.S. will be the exception as

opposed to the norm, and that there will be no quick rebound from the Company’s stagnating

growth. This news caused the price of Novo Nordisk ADRs to decline from $49.87 per ADR on

August 5 to $47.13 per ADR on August 8, or nearly 6%.

7. Then, on October 28, 2016, Novo Nordisk cut its long-term profit growth

forecasts by 50%, specifically citing the increased pricing pressures on diabetes drugs in the U.S.

In addition, the Company further cut its 2016 sales growth and operating profit growth targets.

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Separate from the disappointing earnings, the Company also announced that it received a Civil

Investigative Demand from the U.S. Attorney’s Office for the Southern District of New York

seeking information relating to Novo Nordisk’s contracts and business relationships with PBMs

concerning its insulin products named NovoLog, Novolin and Levemir. On this news, the price

of Novo Nordisk ADRs declined from $40.94 per ADR on October 27 to $35.66 per ADR on

October 28, a decline of roughly 13%. This is the largest decline in the price of Novo Nordisk

ADRs in more than 14 years.

8. Subsequent to the close of the Class Period, on November 3, 2016, Senator Bernie

Sanders and Representative Elijah Cummings sent a letter to the U.S. Department of Justice

calling on federal antitrust regulators to probe illegal collusion by Novo Nordisk and the three

other major insulin producers—Sanofi, Eli Lilly, and Merck—to set the prices for insulin and

other diabetes drugs. In a tacit acknowledgement of its improper conduct, Novo Nordisk

pledged on November 30, 2016 to limit all future drug list price increases to single-digit

percentages.

JURISDICTION AND VENUE

9. The claims asserted herein arise under Sections 10(b) and 20(a) of the Exchange

Act, 15 U.S.C. §§ 78j(b) and 78t(a), and Rule 10b-5 promulgated thereunder by the SEC, 17

C.F.R. § 240.10b-5. This Court has jurisdiction over the subject matter of this action pursuant to

28 U.S.C. §§ 1331 and 1337, and Section 27 of the Exchange Act, 15 U.S.C. § 78aa.

10. Venue is proper in this District pursuant to Section 27 of the Exchange Act and 28

U.S.C. § 1391(b). Novo Nordisk maintains its U.S. headquarters in Plainsboro, New Jersey,

which is situated in this District, and the acts and conduct that constitute the violations of law

complained of herein, including the preparation and/or dissemination to the public of materially

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false and misleading information, occurred in this District. In connection with the acts alleged in

this complaint, Defendants, directly or indirectly, used the means and instrumentalities of

interstate commerce, including, but not limited to, the mails, interstate telephone

communications, and the facilities of the national securities markets.

PARTIES

11. Plaintiff Lehigh County Employees’ Retirement System (“Plaintiff”), based in

Pennsylvania, is a defined benefit plan governed under the Taft-Harley Act. Plaintiff provides

retirement, disability and death benefits to workers within the County of Lehigh, Pennsylvania.

Currently, Plaintiff manages approximately $425 million in assets on behalf of approximately

3,600 participants. Plaintiff purchased shares of Novo Nordisk ADRs on the New York Stock

Exchange during the Class Period and suffered damages as a result of the violations of the

federal securities laws alleged herein.

12. Defendant Novo Nordisk is a global healthcare company focused on diabetes care

and is one of the largest producers of insulin medications. Based in Denmark, the Company was

formed in 1989 by a merger of two Danish companies, Nordisk Gentofte A/S and Novo Industri

A/S. The Company maintains its U.S. headquarters at 800 Scudders Mill Road, Plainsboro, New

Jersey 08536. Novo Nordisk ADRs trade on the New York Stock Exchange, which is an

efficient market, under ticker symbol “NVO.” As of December 31, 2015, Novo Nordisk had

over 240 million ADRs outstanding, owned by hundreds or thousands of investors.

13. Defendant Lars Rebien Sørensen (“Sørensen”) is, and was at all relevant times,

President and Chief Executive Officer of Novo Nordisk. On September 1, 2016, Novo Nordisk

announced that Sørensen would resign from the Company by the end of 2016.

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14. Defendant Jesper Brandgaard (“Brandgaard”) is, and was at all relevant times,

Executive Vice President and Chief Financial Officer of Novo Nordisk.

15. Defendants Sørensen and Brandgaard are collectively referred to hereinafter as

the “Individual Defendants.” The Individual Defendants, because of their positions with Novo

Nordisk, possessed the power and authority to control the contents of Novo Nordisk’s reports to

the SEC, press releases, and presentations to securities analysts, money and portfolio managers,

and institutional investors. Each of the Individual Defendants was provided with copies of the

Company’s reports and press releases alleged herein to be misleading prior to, or shortly after,

their issuance and had the ability and opportunity to prevent their issuance or cause them to be

corrected. Because of their positions and access to material non-public information available to

them, each of the Individual Defendants knew that the adverse facts and omissions specified

herein had not been disclosed to, and were being concealed from, the public, and that the positive

representations and omissions which were being made were then materially false and/or

misleading.

BACKGROUND

16. Novo Nordisk is a global healthcare company and one of the most prolific

producers of diabetes medications. Diabetes is a metabolic condition in which a person’s

pancreas cannot produce insulin, a hormone that controls blood sugar levels. Patients with

diabetes—about 30 million in the U.S. and another 360 million worldwide—are primarily treated

through daily injections of insulin. Novo Nordisk derives roughly 80% of its revenues from

selling insulin-based medications. While there are millions of patients with the condition, the

world market for insulin is dominated by just a handful of companies. Those companies are

Novo Nordisk, Sanofi, Eli Lilly and Merck.

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17. To capitalize on their oligopoly, Novo Nordisk and the three other major players

in the insulin market colluded to increase the prices of their drugs. Indeed, according to an

analysis prepared by the Washington Post, over the past two decades, Novo Nordisk was able to

raise the price of its insulin drugs 450% above the rate of inflation. From 2010-2015, the

Company raised the price of its signature diabetes drug (Levemir) by 169%. In 2014-2015 alone

the Company increased Levemir’s price by 30%, and increased the price of its NovoLog product

by nearly 21%. As Novo Nordisk recently admitted, these price increases were so significant

that “many patients simply can’t afford the medicine they need.”

18. Critically, these price increases were closely synchronized with price increases by

the Company’s purported competitors. For instance, on May 30, 2015, Sanofi increased the

price of its diabetes medication Lantus by over 16%. The very next day, Novo Nordisk

increased the price of Levemir by the exact same amount. The pattern repeated itself six months

later when Sanofi again raised the price of Lantus—this time by almost 12%. Novo Nordisk

quickly increased Levemir’s price to exactly match the price of Lantus. In fact, in 13 instances

since 2009, the prices of Levemir and Lantus have increased in tandem in the U.S. As

demonstrated by the chart below, the prices of several insulin drugs have exhibited a series of

significant, and suspiciously timed price increases. The magnitude and timing of the drug price

increases indicate that Novo Nordisk and the few other companies that control the market for

insulin colluded to fix the prices of their drugs.

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19. Novo Nordisk’s strategy was a success and its earnings soared as a result of its

ability to increase prices and sell its products. Indeed, between 2010 and 2015, Novo Nordisk

delivered 12% annual sales growth, 20% growth in operating profit, and 22% growth in earnings.

But after years of consistently raising prices for insulin, Novo Nordisk and the other major

drugmakers began to experience significant pressure from PBMs to cut or flatten their prices and

were unable to continue their scheme.

NOVO NORDISK DEFRAUDS INVESTORS

20. The Class Period starts on April 30, 2015, the day that Novo Nordisk held its

earnings conference call for the first quarter of 2015. On that call, CEO Lars Rebien Sørensen

announced that the Company achieved operating profit growth of 17% (to $2.1 billion) and sales

growth of 9% (to $3.8 billion), primarily driven by success in its North America segment.

Further, CEO Sørensen assured investors that the Company was “not anticipating any pricing

impact in 2015,” and with specific regard to the Company’s Victoza drug, that the Company is in

“a very strong position with a gold standard product, one should expect that we will hold our

position firm on [] pricing.”

21. In fact, a Danske Bank analyst specifically asked Novo Nordisk on April 30

whether it could still “come back to double-digit growth in the insulin market” given that the

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Company’s competitors were reporting weak underlying growth of “between 1% and 2%” which

was due in large part to “the pressure on prices in U.S.” However, CEO Sørensen simply

dismissed the analyst’s concerns and told investors that despite the pricing pressures, the

Company will still be able to “achieve 10% or more top-line growth in the diabetes market.”

22. The statements and omissions set forth in ¶¶20-21 were materially false and

misleading. In truth, Novo Nordisk’s reported earnings and growth targets were based on the

collusive price fixing of the Company’s insulin drugs. The Company was also experiencing

significant pricing pressures in the U.S. and was only able to conceal those pressures by

engaging in collusive price fixing.

23. On August 6, 2015, the Company held its earnings conference call for the second

quarter of 2015. During that call, CEO Sørensen reported growth of 16% in operating profit (to

$3.9 billion) as well as growth of 9% in sales (to $7.8 billion) for the first six months of 2015.

The growth was driven by strength in the Company’s North America operations and, in

particular, increased sales of Victoza and Levemir. With regard to the pricing of the Company’s

drugs, CEO Sørensen stated that the Company experienced “flat pricing” due to “the strong

performance of Victoza, where we have pricing power because we are the gold standard in that

market. When we look at insulins going forward, we are looking at full-year expectations from

flat to slight positive pricing.”

24. Further, CFO Brandgaard stated on August 6 that “there is a positive impact on

our gross margin to the magnitude of 50 basis points . . . basically coming from an overall higher

sales . . . [of] higher value products. And that trend is expected to continue into second half and

potentially also 2016.”

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25. The statements and omissions set forth in ¶¶23-24 were materially false and

misleading. In truth, Novo Nordisk was experiencing significant pricing pressure in the U.S. and

was only able to report “flat pricing” for its drugs because the Company entered into collusive

agreements with its purported competitors. What’s more, the Company’s reported revenue,

operating profit, sales growth, and margins were overstated in that they were based on collusive

price fixing.

26. The Company held its earnings conference call for the third quarter of 2015 on

October 29, 2015. On that call, CEO Sørensen touted that the Company achieved 9% sales

growth (to $11.8 billion) and 16% operating profit growth (to $5.7 billion) in the first nine

months of 2015 driven in part by strength in Novo Nordisk’s North America business, with the

“highest contribution coming from Victoza and Levemir.” CEO Sørensen also told investors that

the Company expected to achieve mid-to-high single-digit sales growth in 2016, as well as a 3%

increase in pricing.

27. According to CFO Brandgaard, the Company expected to achieve sales growth

for 2015 of 7% to 9%, along with operating profit growth of roughly 20%. CFO Brandgaard

also reiterated that the Company expected to achieve mid-to-high single-digit sales growth in

2016, and that Novo Nordisk expected operating profit growth to increase by the same amount.

According to Brandgaard, this “reflect[s] expectations for continued robust performance of the

portfolio of modern insulins, Tresiba and Victoza.”

28. The statements and omissions set forth in ¶¶26-27 were materially false and

misleading. In truth, Novo Nordisk’s expected growth in sales and operating profit were not

based on the “robust performance of the portfolio of modern insulins,” but rather, the Company’s

assumption that it would continue to collude with its competitors. Further, Novo Nordisk knew

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that it would not be able to increase prices by 3% but-for such collusive activity. The

Company’s sales growth, operating profit growth, and revenue metrics were also materially false

and misleading in that they were based on Novo Nordisk’s collusive agreements to control the

prices of insulin.

29. Further, on February 3, 2016, the Company held its earnings conference call for

the fourth quarter and full year of 2015, during which CEO Sørensen announced operating profit

growth of 14% (to $7.4 billion) and sales growth of 8% (to $16 billion), again driven by strength

in the Company’s North America operations, “with the largest contributions coming from

Victoza and Levemir.” CEO Sørensen also told investors that the Company would achieve 10%

operating profit growth over the long-term.

30. According to CFO Brandgaard, sales and operating profit growth in 2016 would

be between 5% and 9%, but would reach or exceed 10% over the long-term, “reflecting the

current outlook for organic sales growth and the opportunities for operating margin leverage.”

CFO Brandgaard further stated that “if you look to 2015 and become very concrete, then you

could say in 2015 we basically had no effect from prices on our average gross margin.”

31. The statements and omissions set forth in ¶¶29-30 were materially false and

misleading. In truth, the Company’s revenue and earnings metrics were inflated as a result of its

collusive activity. Further, Novo Nordisk’s operating profit and sales growth for 2016 and over

the long-term would be unachievable but-for its scheme given the significant pricing pressures it

was facing in the U.S.

32. Novo Nordisk held its earnings conference call for the first quarter of 2016 on

April 29, 2016. On that day, CEO Sørensen announced that the Company achieved sales growth

of 9% (to $4 billion) and operating profit growth of 10% (after adjusting for a partial divestment

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of a division) driven by strength in the Company’s operations in the United States and

particularly Victoza and Levemir. CEO Sørensen also reiterated that the Company expected to

achieve sales and operating profit growth of between 5% and 9% in 2016. Further, according to

Sørensen, the Company sees “still quite strong growth of Levemir in the U.S. . . . There is some

volume, but there is also a price effect. We took a price increase last year.”

33. Defendant Brandgaard reiterated that the Company expected to achieve 5%-9% in

sales and operating profit growth in 2016 given “a continued robust performance for our modern

insulins . . . Victoza and Tresiba.”

34. The statements and omissions set forth in ¶¶32-33 were materially false and

misleading. In truth, Novo Nordisk’s reported earnings and forecasts were inflated in that they

were based on the collusive price fixing of the Company’s insulin drugs. The Company was also

experiencing significant pricing pressures in the U.S. and was only able to conceal those

pressures by engaging in collusive activity.

DISCLOSURES OF COMPANY’S MISCONDUCT CAUSE MASSIVE INVESTOR


LOSSES

35. On August 5, 2016, the Company announced disappointing earnings for the

second quarter of 2016 because, despite its scheme, it was finally unable to withstand the

intensifying pricing pressure from PBMs. Indeed, the Company announced that the prices of its

drugs—which have been perpetually increasing—would likely be “moderately lower” in 2017.

In fact, Novo Nordisk reported increasing pricing pressure across a broad swath of the

Company’s insulin portfolio.

36. Novo Nordisk also narrowed its forecasts for sales growth to 5%-7% (from 5%-

9%) and operating profit growth to 5%-8% (from 5%-9%) for the year. Also weighing on Novo

Nordisk’s growth is the fact that it lost a significant contract with Express Scripts, the largest

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PBM in the U.S., which refused to cover a number of the Company’s diabetes medications,

including Victoza, Novolin, and NovoLog. Novo Nordisk also lost a contract with

UnitedHealth, another large U.S. PBM, for the Company’s NovoLog product, apparently

because UnitedHealth would no longer pay exorbitant prices for the Company’s drugs.

37. According to an analyst report issued by Deutsche Bank on August 5, the fact that

Novo Nordisk finally acknowledged the “elephant in the room” with regard to the intensifying

pricing pressure “unnerved” investors and “created a stampede.” Similarly, an analyst report

issued by SEB Equities on August 8, stated that “it is [] evident that Novo had to offer large

discounts across its franchise in order to maintain market access” and it is an “ongoing challenge

for Novo Nordisk to convince the largest PBM in the US market, Express Scripts, to include its

products on their national drug lists.”

38. Nevertheless, CEO Sørensen attempted to assure investors by telling them that

“we will see. . . more support for growth” coming from many of the Company’s products. “We

see very strong script growth, we see relatively more stable pricing, even in some instances

opportunities to raise net price slightly. . . I still think it is reasonable for us to have as an

ambition, to grow our diabetes portfolio with 10%.” Despite the Company’s assurances, the

Company’s disappointing earnings and slowing growth caused the price of the Company’s ADRs

to decline from $55.20 per ADR on August 4 to $49.87 per ADR on August 5, or approximately

10%.

39. On August 8, 2016, the Company held a Management Roundtable discussion in

London to attempt to provide more clarity into the Company’s business and pricing strategy.

According to an analyst report issued by Kepler Cheuvreux on August 9 that summarized the

Management Roundtable, the reality is that major net pricing upgrades in the U.S. will be the

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exception as opposed to the norm, and that there will be no quick rebound from the Company’s

stagnating growth. On this news, the price of Novo Nordisk ADRs dropped from $49.87 per

ADR on August 5 to $47.13 per ADR on August 8, or nearly 6%.

40. Less than a month later, on September 1, 2016, Novo Nordisk announced that

CEO Sørensen would resign from the Company by the end of 2016. The announcement was

particularly surprising given that the Board decided just a few months earlier that Sørensen

should remain in the CEO role until his contract expires in 2019. The Company also announced

a number of other executive changes on September 1, including the resignation of Kesper

Hoeiland, the head of the Company’s North America Operations. According to an analyst report

issued by Morgan Stanley on September 1, given the Company’s “very stable and conservative

organization,” the executive changes reflect Novo Nordisk’s “unprecedented challenges such as

US payer pressure and increased competition.”

41. Then, on October 28, 2016, Novo Nordisk announced its second consecutive

quarter of disappointing earnings and cut its long-term profit-growth forecasts by 50%,

specifically citing the increased pricing pressures on diabetes drugs in the U.S. The Company

reported that it expects its long-term profit to grow at a rate of 5% annually, down from the 10%

that Novo Nordisk told investors to expect in February 2016. In addition, the Company also cut

for the second time in as many quarters its 2016 sales growth (from 5%-7% to 5%-6%) and

operating profit growth targets (from 5%-8% to 5%-7%). The Company also stated that it

expects flat to low single-digit percentage growth in operating profit in 2017, and low single-

digit percentage growth in sales for 2017. Given the pricing pressures, Novo Nordisk was forced

to significantly cut costs and reduce the amount that it is able to invest in researching and

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developing new drugs. According to an analyst report issued by Leerink, “NVO mgmt. finally

owned up to the significant challenges it faces in the years ahead.”

42. Separate from the disappointing earnings, the Company also announced on

October 28 that it received a Civil Investigative Demand from the U.S. Attorney’s Office for the

Southern District of New York seeking information relating to Novo Nordisk’s contracts and

business relationships with PBMs concerning its insulin products named NovoLog, Novolin and

Levemir. On this news, the price of Novo Nordisk ADRs declined from $40.94 per ADR on

October 27 to $35.66 per ADR on October 28, a decline of roughly 13%. This was the largest

decline in the price of Novo Nordisk ADRs in more than 14 years.

43. Subsequent to the close of the Class Period, on November 3, 2016, Senator Bernie

Sanders and Representative Elijah Cummings sent a letter to the U.S. Department of Justice

calling on federal antitrust regulators to probe whether Novo Nordisk and the three other major

insulin producers—Sanofi, Eli Lilly, and Merck—colluded to set the prices for insulin and other

diabetes drugs. That letter specifically cited to the skyrocketing prices of insulin over the past 15

years, acknowledged that many of the price increases occurred at the same time, and questioned

the true reasons for the price increases. In a clean break from its anticompetitive scheme, Novo

Nordisk committed on November 30, 2016 to limit all future drug list price increases to single

digit percentages.

LOSS CAUSATION

44. During the Class Period, as detailed herein, Defendants made materially false and

misleading statements and omissions, and engaged in a scheme to deceive the market. This

artificially inflated the price of Novo Nordisk ADRs and operated as a fraud or deceit on the

Class. Later, when Defendants’ prior misrepresentations and fraudulent conduct were disclosed

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to the market on August 5, 2016, August 8, 2016, and October 28, 2016, the price of Novo

Nordisk ADRs fell precipitously, as the prior artificial inflation came out of the price over time.

As a result of their purchases of Novo Nordisk ADRs during the Class Period, Plaintiff and other

members of the Class suffered economic loss, i.e., damages, under the federal securities laws.

CLASS ACTION ALLEGATIONS

45. Plaintiff brings this action as a class action pursuant to Rule 23 of the Federal

Rules of Civil Procedure on behalf of all persons who purchased or otherwise acquired the ADRs

of Novo Nordisk during the Class Period (the “Class”). Excluded from the Class are Defendants

and their families, directors, and officers of Novo Nordisk and their families and affiliates.

46. The members of the Class are so numerous that joinder of all members is

impracticable. The disposition of their claims in a class action will provide substantial benefits

to the parties and the Court. As of December 31, 2015, Novo Nordisk had over 240 million

ADRs outstanding, owned by hundreds or thousands of investors.

47. There is a well-defined community of interest in the questions of law and fact

involved in this case. Questions of law and fact common to the members of the Class which

predominate over questions which may affect individual Class members include:

(a) Whether Defendants violated the Exchange Act;

(b) Whether Defendants omitted and/or misrepresented material facts;

(c) Whether Defendants’ statements omitted material facts necessary in order

to make the statements made, in light of the circumstances under which they were made, not

misleading;

(d) Whether Defendants knew or recklessly disregarded that their statements

and/or omissions were false and misleading;

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(e) Whether the price of Novo Nordisk ADRs was artificially inflated;

(f) Whether Defendants’ conduct caused the members of the Class to sustain

damages; and

(g) The extent of damage sustained by Class members and the appropriate

measure of damages.

48. Plaintiff’s claims are typical of those of the Class because Plaintiff and the Class

sustained damages from Defendants’ wrongful conduct.

49. Plaintiff will adequately protect the interests of the Class and has retained counsel

experienced in class action securities litigation. Plaintiff has no interests which conflict with

those of the Class.

50. A class action is superior to other available methods for the fair and efficient

adjudication of this controversy.

INAPPLICABILITY OF STATUTORY SAFE HARBOR

51. Novo Nordisk’s “Safe Harbor” warnings accompanying its forward-looking

statements issued during the Class Period were ineffective to shield those statements from

liability.

52. Defendants are also liable for any false or misleading forward-looking statements

pleaded herein because, at the time each such statement was made, the speaker knew the

statement was false or misleading and the statement was authorized and/or approved by an

executive officer of Novo Nordisk who knew that the statement was false. None of the historic

or present tense statements made by Defendants were assumptions underlying or relating to any

plan, projection, or statement of future economic performance, as they were not stated to be such

assumptions underlying or relating to any projection or statement of future economic

17
Case 3:17-cv-00209-BRM-LHG Document 1 Filed 01/11/17 Page 18 of 24 PageID: 18

performance when made, nor were any of the projections or forecasts made by Defendants

expressly related to, or stated to be dependent on, those historic or present tense statements when

made.

PRESUMPTION OF RELIANCE

53. At all relevant times, the market for Novo Nordisk’s ADRs was an efficient

market for the following reasons, among others:

(a) Novo Nordisk ADRs met the requirements for listing, and were listed and

actively traded on the New York Stock Exchange, a highly efficient and automated market;

(b) As a regulated issuer, Novo Nordisk filed periodic public reports with the

SEC and the New York Stock Exchange;

(c) Novo Nordisk regularly and publicly communicated with investors via

established market communication mechanisms, including through regular disseminations of

press releases on the national circuits of major newswire services and through other wide-

ranging public disclosures, such as communications with the financial press and other similar

reporting services; and

(d) Novo Nordisk was followed by several securities analysts employed by

major brokerage firm(s) who wrote reports which were distributed to the sales force and certain

customers of their respective brokerage firm(s). Each of these reports was publicly available and

entered the public marketplace.

54. As a result of the foregoing, the market for Novo Nordisk ADRs promptly

digested current information regarding Novo Nordisk from all publicly available sources and

reflected such information in the price of Novo Nordisk ADRs. Under these circumstances, all

purchasers of Novo Nordisk ADRs during the Class Period suffered similar injury through their

18
Case 3:17-cv-00209-BRM-LHG Document 1 Filed 01/11/17 Page 19 of 24 PageID: 19

purchase of Novo Nordisk ADRs at artificially inflated prices and the presumption of reliance

applies.

55. A Class-wide presumption of reliance is also appropriate in this action under the

Supreme Court’s holding in Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128

(1972), because the Class’ claims are grounded on Defendants’ material omissions. Because this

action involves Defendants’ failure to disclose material adverse information regarding Novo

Nordisk’s sales of insulin—information that Defendants were obligated to disclose—positive

proof of reliance is not a prerequisite to recovery. All that is necessary is that the facts withheld

be material in the sense that a reasonable investor might have considered them important in

making investment decisions. Given the importance of Novo Nordisk’s insulin business, as set

forth above, that requirement is satisfied here.

COUNT I
For Violation of Section 10(b) of the Exchange Act and Rule 10b-5 Against All Defendants

56. Plaintiff repeats and realleges each and every allegation contained above as if

fully set forth herein.

57. During the Class Period, Defendants carried out a plan, scheme, and course of

conduct which was intended to and, throughout the Class Period, did: (i) deceive the investing

public, including Plaintiff and other Class members, as alleged herein; and (ii) cause Plaintiff and

other members of the Class to purchase Novo Nordisk ADRs at artificially inflated prices.

58. Defendants (i) employed devices, schemes, and artifices to defraud; (ii) made

untrue statements of material fact and/or omitted to state material facts necessary to make the

statements not misleading; and (iii) engaged in acts, practices, and a course of business which

operated as a fraud and deceit upon the purchasers of the Company’s ADRs in an effort to

19
Case 3:17-cv-00209-BRM-LHG Document 1 Filed 01/11/17 Page 20 of 24 PageID: 20

maintain artificially high market prices for Novo Nordisk ADRs in violation of Section 10(b) of

the Exchange Act and Rule 10b-5 promulgated thereunder.

59. Defendants, individually and in concert, directly and indirectly, by the use, means

or instrumentalities of interstate commerce and/or of the mails, engaged and participated in a

continuous course of conduct to conceal adverse material information about the Company’s

financial well-being, operations, and prospects.

60. During the Class Period, Defendants made the false statements specified above,

which they knew or recklessly disregarded to be false or misleading in that they contained

misrepresentations and failed to disclose material facts necessary in order to make the statements

made, in light of the circumstances under which they were made, not misleading.

61. Defendants had actual knowledge of the misrepresentations and omissions of

material fact set forth herein, or recklessly disregarded the true facts that were available to them.

Defendants engaged in this misconduct to conceal Novo Nordisk’s true condition from the

investing public and to support the artificially inflated prices of the Company’s ADRs.

62. Plaintiff and the Class have suffered damages in that, in reliance on the integrity

of the market, they paid artificially inflated prices for Novo Nordisk ADRs. Plaintiff and the

Class would not have purchased the Company’s ADRs at the prices they paid, or at all, had they

been aware that the market prices for Novo Nordisk ADRs had been artificially inflated by

Defendants’ fraudulent course of conduct.

63. As a direct and proximate result of Defendants’ wrongful conduct, Plaintiff and

the other members of the Class suffered damages in connection with their respective purchases

of the Company’s ADRs during the Class Period.

20
Case 3:17-cv-00209-BRM-LHG Document 1 Filed 01/11/17 Page 21 of 24 PageID: 21

64. By virtue of the foregoing, Defendants violated Section 10(b) of the Exchange

Act and Rule 10b-5 promulgated thereunder.

COUNT II
For Violation of Section 20(a) of the Exchange Act Against the Individual Defendants

65. Plaintiff repeats, incorporates, and realleges each and every allegation set forth

above as if fully set forth herein.

66. The Individual Defendants acted as controlling persons of Novo Nordisk within

the meaning of Section 20(a) of the Exchange Act. By virtue of their high-level positions,

participation in and/or awareness of the Company’s operations, direct involvement in the day-to-

day operations of the Company, and/or intimate knowledge of the Company’s actual

performance, and their power to control public statements about Novo Nordisk, the Individual

Defendants had the power and ability to control the actions of Novo Nordisk and its employees.

By reason of such conduct, the Individual Defendants are liable pursuant to Section 20(a) of the

Exchange Act.

WHEREFORE, Plaintiff prays for judgment as follows:

A. Determining that this action is a proper class action under Rule 23 of the Federal

Rules of Civil Procedure;

B. Awarding compensatory damages in favor of Plaintiff and other Class members

against all Defendants, jointly and severally, for all damages sustained as a result

of Defendants’ wrongdoing, in an amount to be proven at trial, including interest

thereon;

C. Awarding Plaintiff and the Class their reasonable costs and expenses incurred in

this action, including attorneys’ fees and expert fees; and

21
Case 3:17-cv-00209-BRM-LHG Document 1 Filed 01/11/17 Page 22 of 24 PageID: 22

D. Awarding such equitable/injunctive or other further relief as the Court may deem

just and proper.

JURY DEMAND

Plaintiff demands a trial by jury.

DATED: January 11, 2017

/s/ James E. Cecchi


CARELLA, BYRNE, CECCHI, OLSTEIN,
BRODY & AGNELLO, P.C.
James E. Cecchi
5 Becker Farm Road
Roseland, New Jersey 07068
Telephone: (973) 994-1700
Facsimile: (973) 994-1744
jcecchi@carellabyrne.com

Liaison Counsel for Plaintiff Lehigh County


Employees’ Retirement System

BERNSTEIN LITOWITZ BERGER


& GROSSMANN LLP
Gerald H. Silk (pro hac vice forthcoming)
Hannah Ross (pro hac vice forthcoming)
Avi Josefson (pro hac vice forthcoming)
1251 Avenue of the Americas
New York, New York 10020
Telephone: (212) 554 1400
Facsimile: (212) 554 1444
jerry@blbglaw.com
hannah@blbglaw.com
avi@blbglaw.com

Counsel for Plaintiff Lehigh County


Employees’ Retirement System

22
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Case 3:17-cv-00209-BRM-LHG Document 1 Filed 01/11/17 Page 24 of 24 PageID: 24
Case 3:17-cv-00209-BRM-LHG Document 1-1 Filed 01/11/17 Page 1 of 2 PageID: 25
JS 44 (Rev. 0 /16) CIVIL COVER SHEET
The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as
provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the
purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.)

I. (a) PLAINTIFFS DEFENDANTS


Lehigh County Employees' Retirement System Novo Nordisk A/S, Lars Rebien Sørensen and Jesper Brandgaard

(b) County of Residence of First Listed Plaintiff Lehigh County, PA County of Residence of First Listed Defendant
(EXCEPT IN U.S. PLAINTIFF CASES) (IN U.S. PLAINTIFF CASES ONLY)
NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF
THE TRACT OF LAND INVOLVED.

(c) Attorneys (Firm Name, Address, and Telephone Number) Attorneys (If Known)
James E. Cecchi, Carella, Byrne, Cecchi, Olstein, Brody & Agnello, P.C.,
5 Becker Farm Road, Roseland, NJ 07068;
Email: jcecchi@carellabyrne.com; Tel: 973-994-1700

II. BASIS OF JURISDICTION (Place an “X” in One Box Only) III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff
(For Diversity Cases Only) and One Box for Defendant)
1 U.S. Government 3 Federal Question PTF DEF PTF DEF
Plaintiff (U.S. Government Not a Party) Citizen of This State 1 1 Incorporated or Principal Place 4 4
of Business In This State

2 U.S. Government 4 Diversity Citizen of Another State 2 2 Incorporated and Principal Place 5 5
Defendant (Indicate Citizenship of Parties in Item III) of Business In Another State

Citizen or Subject of a 3 3 Foreign Nation 6 6


Foreign Country
IV. NATURE OF SUIT (Place an “X” in One Box Only)
CONTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES
110 Insurance PERSONAL INJURY PERSONAL INJURY 625 Drug Related Seizure 422 Appeal 28 USC 158 375 False Claims Act
120 Marine 310 Airplane 365 Personal Injury - of Property 21 USC 881 423 Withdrawal 376 Qui Tam (31 USC
130 Miller Act 315 Airplane Product Product Liability 690 Other 28 USC 157 3729(a))
140 Negotiable Instrument Liability 367 Health Care/ 400 State Reapportionment
150 Recovery of Overpayment 320 Assault, Libel & Pharmaceutical PROPERTY RIGHTS 410 Antitrust
& Enforcement of Judgment Slander Personal Injury 820 Copyrights 430 Banks and Banking
151 Medicare Act 330 Federal Employers’ Product Liability 830 Patent 450 Commerce
152 Recovery of Defaulted Liability 368 Asbestos Personal 840 Trademark 460 Deportation
Student Loans 340 Marine Injury Product 470 Racketeer Influenced and
(Excludes Veterans) 345 Marine Product Liability LABOR SOCIAL SECURITY Corrupt Organizations
153 Recovery of Overpayment Liability PERSONAL PROPERTY 710 Fair Labor Standards 861 HIA (1395ff) 480 Consumer Credit
of Veteran’s Benefits 350 Motor Vehicle 370 Other Fraud Act 862 Black Lung (923) 490 Cable/Sat TV
160 Stockholders’ Suits 355 Motor Vehicle 371 Truth in Lending 720 Labor/Management 863 DIWC/DIWW (405(g)) 850 Securities/Commodities/
190 Other Contract Product Liability 380 Other Personal Relations 864 SSID Title XVI Exchange
195 Contract Product Liability 360 Other Personal Property Damage 740 Railway Labor Act 865 RSI (405(g)) 890 Other Statutory Actions
196 Franchise Injury 385 Property Damage 751 Family and Medical 891 Agricultural Acts
362 Personal Injury - Product Liability Leave Act 893 Environmental Matters
Medical Malpractice 790 Other Labor Litigation 895 Freedom of Information
REAL PROPERTY CIVIL RIGHTS PRISONER PETITIONS 791 Employee Retirement FEDERAL TAX SUITS Act
210 Land Condemnation 440 Other Civil Rights Habeas Corpus: Income Security Act 870 Taxes (U.S. Plaintiff 896 Arbitration
220 Foreclosure 441 Voting 463 Alien Detainee or Defendant) 899 Administrative Procedure
230 Rent Lease & Ejectment 442 Employment 510 Motions to Vacate 871 IRS—Third Party Act/Review or Appeal of
240 Torts to Land 443 Housing/ Sentence 26 USC 7609 Agency Decision
245 Tort Product Liability Accommodations 530 General 950 Constitutionality of
290 All Other Real Property 445 Amer. w/Disabilities - 535 Death Penalty IMMIGRATION State Statutes
Employment Other: 462 Naturalization Application
446 Amer. w/Disabilities - 540 Mandamus & Other 465 Other Immigration
Other 550 Civil Rights Actions
448 Education 555 Prison Condition
560 Civil Detainee -
Conditions of
Confinement
V. ORIGIN (Place an “X” in One Box Only)
1 Original 2 Removed from 3 Remanded from 4 Reinstated or 5 Transferred from 6 Multidistrict 8 Multidistrict
Proceeding State Court Appellate Court Reopened Another District Litigation - Litigation -
(specify) Transfer Direct File
Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity):
15 U.S.C. §§ 78j(b) and 78t(a)
VI. CAUSE OF ACTION Brief description of cause:
Violations of the federal securities laws
VII. REQUESTED IN CHECK IF THIS IS A CLASS ACTION DEMAND $ CHECK YES only if demanded in complaint:
COMPLAINT: UNDER RULE 23, F.R.Cv.P. JURY DEMAND: Yes No
VIII. RELATED CASE(S)
(See instructions):
IF ANY JUDGE DOCKET NUMBER
DATE SIGNATURE OF ATTORNEY OF RECORD
01/11/2017 /s/ James E. Cecchi
FOR OFFICE USE ONLY

RECEIPT # AMOUNT APPLYING IFP JUDGE MAG. JUDGE


Case 3:17-cv-00209-BRM-LHG Document 1-1 Filed 01/11/17 Page 2 of 2 PageID: 26
JS 44 Reverse (Rev. 0 /16)

INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS 44


Authority For Civil Cover Sheet

The JS 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and service of pleading or other papers as
required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is
required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. Consequently, a civil cover sheet is submitted to the Clerk of
Court for each civil complaint filed. The attorney filing a case should complete the form as follows:

I.(a) Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use
only the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and
then the official, giving both name and title.
(b) County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the
time of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land
condemnation cases, the county of residence of the "defendant" is the location of the tract of land involved.)
(c) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting
in this section "(see attachment)".

II. Jurisdiction. The basis of jurisdiction is set forth under Rule 8(a), F.R.Cv.P., which requires that jurisdictions be shown in pleadings. Place an "X"
in one of the boxes. If there is more than one basis of jurisdiction, precedence is given in the order shown below.
United States plaintiff. (1) Jurisdiction based on 28 U.S.C. 1345 and 1348. Suits by agencies and officers of the United States are included here.
United States defendant. (2) When the plaintiff is suing the United States, its officers or agencies, place an "X" in this box.
Federal question. (3) This refers to suits under 28 U.S.C. 1331, where jurisdiction arises under the Constitution of the United States, an amendment
to the Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code takes
precedence, and box 1 or 2 should be marked.
Diversity of citizenship. (4) This refers to suits under 28 U.S.C. 1332, where parties are citizens of different states. When Box 4 is checked, the
citizenship of the different parties must be checked. (See Section III below; NOTE: federal question actions take precedence over diversity
cases.)

III. Residence (citizenship) of Principal Parties. This section of the JS 44 is to be completed if diversity of citizenship was indicated above. Mark this
section for each principal party.

IV. Nature of Suit. Place an "X" in the appropriate box. If the nature of suit cannot be determined, be sure the cause of action, in Section VI below, is
sufficient to enable the deputy clerk or the statistical clerk(s) in the Administrative Office to determine the nature of suit. If the cause fits more than
one nature of suit, select the most definitive.

V. Origin. Place an "X" in one of the seven boxes.


Original Proceedings. (1) Cases which originate in the United States district courts.
Removed from State Court. (2) Proceedings initiated in state courts may be removed to the district courts under Title 28 U.S.C., Section 1441.
When the petition for removal is granted, check this box.
Remanded from Appellate Court. (3) Check this box for cases remanded to the district court for further action. Use the date of remand as the filing
date.
Reinstated or Reopened. (4) Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date.
Transferred from Another District. (5) For cases transferred under Title 28 U.S.C. Section 1404(a). Do not use this for within district transfers or
multidistrict litigation transfers.
Multidistrict Litigation – Transfer. (6) Check this box when a multidistrict case is transferred into the district under authority of Title 28 U.S.C.
Section 1407.
Multidistrict Litigation – Direct File. (8) Check this box when a multidistrict case is filed in the same district as the Master MDL docket.
PLEASE NOTE THAT THERE IS NOT AN ORIGIN CODE 7. Origin Code 7 was used for historical records and is no longer relevant due to
changes in statue.

VI. Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional
statutes unless diversity. Example: U.S. Civil Statute: 47 USC 553 Brief Description: Unauthorized reception of cable service

VII. Requested in Complaint. Class Action. Place an "X" in this box if you are filing a class action under Rule 23, F.R.Cv.P.
Demand. In this space enter the actual dollar amount being demanded or indicate other demand, such as a preliminary injunction.
Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded.

VIII. Related Cases. This section of the JS 44 is used to reference related pending cases, if any. If there are related pending cases, insert the docket
numbers and the corresponding judge names for such cases.

Date and Attorney Signature. Date and sign the civil cover sheet.
From: Charles Fournier charles.fournier@t1df.org
Subject: Re: Call regarding Lehigh County Employees’ Retirement System vs. Novo Nordisk, Case No. Case 3:17-cv-00209 (BRM)
(LHG)
Date: February 16, 2018 at 11:34 PM
To: Hannah Ross Hannah@blbglaw.com
Cc: Boss Julia julia.boss@t1df.org, Katherine M. Sinderson KatieM@blbglaw.com, Adam Hollander Adam.Hollander@blbglaw.com

Ms. Ross,

The email regarding the Yale event was sent to you by mistake. It was intended to a person
with a similar name.

The fact that your investor clients have a dispute with Novo Nordisk does not lessen or
remediate the inherently adversarial nature of our relationship with them. Your clients have
derived and continue to derive financial benefits from the drug pricing scheme we are
currently challenging.

You may thus understand that I do not wish to discuss certain matters that pertain to our
other cases—especially when I am about to board a plane in San Francisco. I am back to
Oregon on Monday. If you want to talk, I am available Monday or Tuesday between 9am and
6pm PST.

Regards,

Charles Fournier, J.D.


Vice President
Type 1 Diabetes Defense Foundation
Charles.Fournier@t1df.org
(206) 643-1479

@t1df_advocacy
https://twitter.com/t1df_advocacy
https://www.linkedin.com/company/10518969/
https://www.facebook.com/T1DefenseFoundation/
www.t1df.org

On Feb 16, 2018, at 12:31 PM, Hannah Ross <Hannah@blbglaw.com> wrote:

Dear Mr. Fournier,

Thank you for your email.

In response to your question, my colleagues Katie Sinderson and Adam Hollander


called you concerning your inquiry to our client Lehigh County. We understand you
declined to speak with us regarding your inquiry, please let us know if you change your
mind.
Ms. Sinderson and Mr. Hollander are copied on this email and would be happy to speak
Ms. Sinderson and Mr. Hollander are copied on this email and would be happy to speak
with you.

In addition, I have not participated in any event at Yale University.

Regards,
Hannah

From: Charles Fournier [mailto:charles.fournier@t1df.org]


Sent: Thursday, February 15, 2018 1:21 PM
To: Hannah Ross <Hannah@blbglaw.com>
Cc: Boss Julia <julia.boss@t1df.org>
Subject: Call regarding Lehigh County Employees’ Retirement System vs. Novo
Nordisk, Case No. Case 3:17-cv-00209 (BRM)(LHG)

Dear Ms. Ross,

I received a call from your law firm yesterday morning while I was boarding a
plane in San Francisco. The call concerned a request I made to a Lehigh County
employee pursuant to Pennsylvania’s Right to Know Law. That request is related
to a case your firm filed in January 2017: Lehigh County Employees’ Retirement
System vs. Novo Nordisk, Case No. Case 3:17-cv-00209 (BRM)(LHG)

Would you please confirm that you are the person who called me?

If not, would you please let me know the name and contact details of the person
who made that call.

Regards,

Charles Fournier, J.D.


Vice President
Type 1 Diabetes Defense Foundation
Charles.Fournier@t1df.org
(206) 643-1479

@t1df_advocacy
https://twitter.com/t1df_advocacy
https://www.linkedin.com/company/10518969/
https://www.facebook.com/T1DefenseFoundation/
www.t1df.org
MINUTES

The Oklahoma Firefighters Pension and Retirement Board met January 20, 2017, in the
Lincoln Plaza Office Building at 6601 Broadway Ext., Suite 100, Oklahoma City, OK.
Written notice was sent to Board members and interested parties, posted 24 hours before
the meeting and filed with the Secretary of State in compliance with the Open Meeting
Laws.

Chairman Michael Duncan called the meeting to order.

Members Present: Michel Duncan, Raanon Adams, Matt Lay, Jim Long,
Mike Kelley, Paul Gallahar, Dana Cramer, Craig Freeman,
Janet Kohls, Dereck Cassady arriving at 8:40 A.M.,
Brandy Manek arriving at 9:15 A.M. and Frank Stone
arriving at 9:30 A.M.

Others: Robert Jones, Director; Duane Michael, Assistant Director;


James Reynolds, Assistant Director; Chase Rankin,
Controller; Terri Williams, Executive Secretary; Marc
Edwards, Legal Counsel

Visitors: Troy Brown and Tim Nash, Andco Consulting; Greg


Rogers, AJO: Craig Auwaeter and Rui Cardoso, Buetel
Goodman; John Karl, WCM

Absent: Doug Jacobson

APPROVAL/MINUTES DATED DECEMBER 16, 2016:

Motion was made by Mr. Kelly and seconded by Mr. Lay to approve the minutes
dated December 16, 2016. Ayes: Messrs. Duncan, Adams, Lay, Long, Kelley,
Gallahar, Freeman, Kohls, and Cramer. Nayes: None. Motion carried.

REQUEST APPROVAL/CONSENT AGENDA, A COPY IS ATTACHED:

Motion was made by Mr. Long and seconded by Mr. Cramer to approve the Consent
Agenda dated January 20, 2017. Ayes: Messrs. Duncan, Adams, Lay, Long, Kelley,
Cramer, Freeman, Kohls and Gallahar. Nayes: None. Motion carried.

_________________________________
Oklahoma Firefighters Pension System
January 20, 2017
Page 1
AJO/GREG ROGERS:

Mr. Rogers gave a presentation for AJO.

3 Months 1 Year 3 Years


Ending Ending Ending
12/31/2016 12/31/2016 12/31/2016

AJO 9.19% 9.75% 6.67%


Russell 1000 Value 6.68% 17.34% 8.59%

BUETEL GOODMAN/CRAIG AUWAETER & RUI CARDOSO:

Mr. Auwaeter and Mr. Cardoso gave a presentation for Buetel Goodman.

3 Months 05/01/2016
Ending Ending
12/31/2016 12/31/2016

Buetel Goodman 5.97% 14.35%


Russell 1000 Value 6.68% 13.07%

WCM/JOHN KARL:

Mr. Karl gave a presentation for WCM

3 Months 1 Year 3 Years


Ending Ending Ending
12/31/2016 12/31/2016 12/31/2016

WCM (6.65)% 1.22% 3.13%


Msci AC World ex USA (1.25)% 4.50% (1.76)%

ANDCO CONSULTING/TROY BROWN AND TIM NASH:

1. Presenting Manager Review.

Mr. Brown and Mr. Nash reviewed the presenting managers to the Board.

_________________________________
Oklahoma Firefighters Pension System
January 20, 2017
Page 2
INVESTMENT COMMITTEE/MATT LAY:

1. Review Investment Performance.

3 Months 1 Year 3 Years


Ending Ending Ending
12/31/2016 12/31/2016 12/31/2016

Total Fund 0.74% 7.40% 5.44%


Policy 0.70% 8.20% 5.39%

2. Discussion of Ardian on Early Secondaries Fund VI.

3. Discussion of Pomona Capital on Fund I.

4. Discussion of Private Equity Manager presentations.

Motion was made by Mr. Adams and seconded by Mr. Long to approve a $50 million
commitment to AESF VI Fund offered by Ardian and a $5 million commitment Ponoma
Capital 1X Fund. Messrs. Ayes: Duncan, Adams, Cassady, Freeman, Cramer, Lay,
Long, Kelley, Manek, Kohls, Stone and Gallahar. Nayes: None. Motion carried.

MARC EDWARDS/LEGAL COUNSEL REPORT. DISCUSSION, VOTE, AND


ANY OTHER NECESSARY ACTION TO IMPLEMENT DISCUSSION AND
VOTE:

1. In re: FX Litigation, Case No. 13-cv-07789 (SDNY) (Scott & Scott)

2. Shah v. Rocket Fuel Inc., et al. Case No. 14-CV-03998 (USDC ND Calif)

3. In re: Castlight Health; Shareholder Litigation; Case No. CIV-533647 (Sup.


Ct. Calif, San Mateo)

4. Avila, et al. v Lifelock, Inc. et al.: Case No. 15-cv-01398-DKD (USDC


District of Arizona)

5. In re: Broadcom Corporation Stockholder Litigation; Case No. 15-cv-00979-


JVS-PJW (USDC CD Calif) (Cohen Milstein)

6. OFP et a; v. Corbat et al and Citigroup, Inc., Case No. 12151-VCG<


(Chancery Court of State of Delaware) (Grant)

7. Murphy v. Precision Castparts Corp. et al.: Case No. 16-cv-00521-SB,


(District of Oregon, Portland) (3) (Labaton)

_________________________________
Oklahoma Firefighters Pension System
January 20, 2017
Page 3
8. In re: Finisar Corporation Securities Litigation; Case No. 5:11-CV-01252-
EJD, (USDC ND Calif) (AFT)

9. Review and consider recommendations on the following cases:

a. Lehigh County Employees Retirement System v. Novo Nordisk A/S,


Case No. 17-cv-00209 (USDC, N.J.)

1. BLBG
2. Bernstein Liebhard
3. Labaton
4. Berman DeValerio
5. Kessler Topaz
6. Robbins Gellar

Motion was made by Mr. Long and seconded by Mr. Lay to retain BLBG as lead
Plaintiff in the Novo Nordisk case. Messrs. Ayes: Messrs. Duncan, Adams, Cassady,
Freeman, Cramer, Lay, Long, Manek, Kelley, Kohls, and Gallahar. Nayes: None.
Motion carried.

10. Report on the current status of all other litigation involving the Pension
System.

a. Baggs v Baggs, Case No. FD_2011-375, (Canadian County District


Court)

Mr. Edwards reviewed the Baggs & Baggs case with the Board.

LYNDALL G. MILES/MOORE - APPLICATION FOR “DISABILITY IN THE


LINE OF DUTY” PENSION, EFFECTIVE JANUARY 1, 2017:

Motion was made by Mr. Long and seconded by Mr. Cassady to approve the Application
for “Disability in the Line of Duty”, effective January 1, 2017. Messrs. Ayes: Messrs.
Duncan, Adams, Cassady, Freeman, Cramer, Lay, Long, Manek, Kelley, Kohls, Stone,
and Gallahar. Nayes: None. Motion carried.

JUSTIN B. WIEDEL/MUSKOGEE – APPLICATION FOR “DISABILITY IN THE


LINE OF DUTY” PENSION, EFFECTIVE OCTOBER 7, 2016:

Motion was made by Mr. Long and seconded by Mr. Lay to send Mr. Wiedel to the State
Doctor. Messrs. Ayes: Duncan, Adams, Cassady, Freeman, Cramer, Lay, Long, Kelley,
Manek, Kohls, Stone, and Gallahar. Nayes: None. Motion carried.

_________________________________
Oklahoma Firefighters Pension System
January 20, 2017
Page 4
Motion was made by Mr. Long and seconded by Mr. Freeman to modify the Application
for “Disability in the Line of Duty” to “Disability Not in the Line of Duty”, effective
October 7, 2016. Messrs. Ayes: Duncan, Adams, Cassady, Freeman, Cramer, Lay, Long,
Kelley, Manek, Kohls, Stone and Gallahar. Nayes: None. Motion carried.

JEFF S. HEINZIG/OKLAHOMA CITY – APPLICATION FOR “DISABILITY IN


THE LINE OF DUTY” PENSION, EFFECTIVE JANUARY 1, 2017:

Motion was made by Mr. Long and seconded by Mr. Kelley to approve the Application
for “Disability in the Line of Duty”, effective January 1, 2017. Messrs. Ayes: Duncan,
Adams, Cassady, Freeman, Cramer, Lay, Long, Kelley, Manek, Kohls and Gallahar.
Nayes: Stone. Motion carried.

DAVID MCCUDDY/OKLAHOMA CITY – APPLICATION FOR “DISABILITY


IN THE LINE OF DUTY” PENSION, EFFECTIVE JANUARY 1, 2017:

Motion was made by Mr. Long and seconded by Mr. Kelley to approve the Application
for “Disability in the Line of Duty”, effective January 1, 2017. Ayes: Messrs. Duncan,
Adams, Cassady, Lay, Long, Kelley, and Gallahar. Nayes: Cramer, Manek, Kohls,
Freeman and Stone. Motion carried.

ROBERT TINDALL/OKLAHOMA CITY – APPLICATION FOR “DISABILITY


IN THE LINE OF DUTY” PENSION, EFFECTIVE JANUARY 1, 20107:

Motion was made by Mr. Long and seconded by Mr. Lay to modify the Application
For “Disability in the Line of Duty” to “Service”, effective January1, 2017. Ayes:
Messrs. Duncan, Adams, Cassady, Kohls, Cramer, Lay, Long, Kelley, and Gallahar.
Freeman, Stone and Manek. Motion carried.

EDWARD WOFFORD/OWASSO - APPLICATION FOR “DISABILITY IN THE


LINE OF DUTY” PENSION, EFFECTIVE DECEMBER 25, 2016:

Motion was made by Mr. Long and seconded by Mr. Lay to approve the Application for
“Disability in the Line of Duty”, effective December 25, 2016. Ayes: Messrs. Duncan,
Adams, Cassady, Kohls, Cramer, Lay, Long, Kelley, Manek, Freeman, Stone, and
Gallahar. Nayes: None. Motion carried.

STEPHEN MOELLER/TULSA – APPLICATION FOR “DISABILITY IN THE


LINE OF DUTY”, EFFECTIVE JANUARY 1, 2017:

Motion was made by Mr. Lay and seconded by Mr. Long to modify the Application for
“Disability in the Line of Duty”, effective January 1, 2017. Ayes: Messrs. Duncan,
Adams, Cassady, Kohls, Cramer, Lay, Long, Kelley, Manek, Freeman, Stone, and
Gallahar. Nayes: None. Motion carried.

_________________________________
Oklahoma Firefighters Pension System
January 20, 2017
Page 5
SCOTT A. WRIGHT/TULSA – APPLICATION FOR “DISABILITY IN THE
LINE OF DUTY”, EFFECTIVE JANUARY 1, 2017:

Motion was made by Mr. Cramer and seconded by Mr. Lay to modify the Application for
“Disability in the Line of Duty” to “Service”, effective January 1, 2017. Ayes: Messrs.
Duncan, Adams, Cassady, Cramer, Lay, Long, Kohls, Kelley, Manek, Stone, Freeman,
and Gallahar. Nayes: None. Motion carried.

DENNIS GARRETT/BRENT RURAL – APPLICATION FOR “DISABILITY NOT


IN THE LINE OF DUTY”, EFFECTIVE OCTOBER 26, 2016:

Motion was made by Mr. Lay and seconded by Mr. Cassady to approve the Application
for “Disability Not in the Line of Duty”, effective October 26, 2016. Ayes: Messrs.
Duncan, Adams, Cassady, Cramer, Lay, Long, Kelley, Manek, Freeman, Kohls, Stone,
and Gallahar. Nayes: None. Motion carried.

ROGER W. CRAIG/EDGE WATER PARK – APPLICATION FOR “DISABILITY


NOT IN THE LINE OF DUTY”, EFFECTIVE, DECEMBER 22, 2016:

Motion was made by Mr. Long and seconded by Mr. Lay to approve the Application for
“Disability Not in the Line of Duty”, effective December 22, 2016. Ayes: Messrs.
Duncan, Adams, Cassady, Freeman, Stone, Cramer, Lay, Long, Manek, Kohls, Kelley,
and Gallahar. Nayes: None. Motion carried.

MARK A. LONG/MARBLE – APPLICATION FOR “DISABILITY NOT IN THE


LINE OF DUTY”, EFFECTIVE MAY 13, 2016:

Motion was made by Mr. Long and seconded by Mr. Lay to approve the Application for
“Disability in the Line of Duty”, effective May 13, 2016. Ayes: Messrs. Duncan,
Adams, Cassady, Freeman, Stone, Cramer, Lay, Long, Manek, Kohls, Kelley, and
Gallahar. Nayes: None. Motion carried.

RANDY L. LEMONS/MOORE – REQUEST TO MODIFY PENSION FROM


“SERVICE” TO “DISABILITY IN THE LINE OF DUTY”:

Motion was made by Mr. Lay and seconded by Mr. Long to modify the Application from
“Service” to “Disability in the Line of Duty” based on the medical information submitted.
Ayes: Messrs. Duncan, Adams, Cassady, Freeman, Stone, Cramer, Lay, Long, Manek,
Kohls, Kelley, and Gallahar. Nayes: None. Motion carried.

_________________________________
Oklahoma Firefighters Pension System
January 20, 2017
Page 6
DANNY TRACEY/OKLAHOMA CITY – REQUEST TO MODIFY PENSION
FROM “SERVICE” TO “DISABILITY IN THE LINE OF DUTY”:

Motion was made by Mr. Long and seconded by Mr. Lay to modify the Application from
“Service” to “Disability in the Line of Duty” based on the medical information submitted.
Ayes: Messrs. Duncan, Adams, Cassady, Freeman, Stone, Cramer, Lay, Long, Manek,
Kohls, Kelley, and Gallahar. Nayes: None. Motion carried.

RUBEN J. WORLEY/SWODA – REQUEST TO MODIFY PENSION FROM


“SERVICE” TO “DISABILITY IN THE LINE OF DUTY”:

Motion was made by Mr. Freeman and seconded by Mr. Lay to take no action on this
item. Ayes: Messrs. Duncan, Adams, Cassady, Freeman, Stone, Cramer, Lay, Long,
Manek, Kohls, Kelley, and Gallahar. Nayes: None. Motion carried.

JAMES HAYES/TULSA – REQUEST TO MODIFY PENSION FROM


“SERVICE” TO “DISABILITY IN THE LINE OF DUTY”:

Motion was made by Mr. Lay and seconded by Mr. Kelly to modify the Application from
“Service “ to “Disability in the Line of Duty” based on the medical information
submitted. Ayes: Messrs. Duncan, Adams, Cassady, Freeman, Stone, Cramer, Lay,
Long, Manek, Kohls, Kelley, and Gallahar. Nayes: None. Motion carried.

MARK A. STEIN/TULSA – REQUEST TO MODIFY PENSION FROM


“SERVICE” TO “DISABILITY IN THE LINE OF DUTY”:

Motion was made by Mr. Long and seconded by Mr. Lay to modify the Application from
“Service” to “Disability in the Line of Duty” based on the medical information submitted.
Ayes: Messrs. Duncan, Adams, Cassady, Freeman, Stone, Cramer, Lay, Long, Manek,
Kohls, Kelley, and Gallahar. Nayes: None. Motion carried

CARSON COMBEST/PONCA CITY – APPEAL OF ADMINISTRATIVE


DETERMINATION TO DENY SYSTEM MEMBERSHIP DUE TO A
CATEGORY A MEDICAL CONDITION:

Motion was made by Mr. Long and seconded by Mr. Lay to approve for Carson Combest
for membership in the Pension System. Ayes: Messrs. Duncan, Adams, Cassady,
Freeman, Stone, Cramer, Lay, Long, Manek, Kohls, Kelley, and Gallahar. Nayes: None.
Motion carried

_________________________________
Oklahoma Firefighters Pension System
January 20, 2017
Page 7
DECLARE AS A “DEATH IN THE LINE OF DUTY” FOR ANDREW
SIMPSON/TULSA – FOR PURPOSES OF TUITION WAIVER PURSUANT TO
70 O.S. SECTION 3218.7:

Motion was made by Mr. Lay and seconded by Mr. Kelley to enter into Executive
Session. Ayes: Messrs. Duncan, Adams, Cassady, Freeman, Stone, Cramer, Lay, Long,
Manek, Kohls, Kelley, and Gallahar. Nayes: None. Motion carried.

Motion was made by Mr. Long and seconded by Mr. Cassady into Open Session. Ayes:
Messrs. Duncan, Adams, Cassady, Freeman, Stone, Cramer, Lay, Long,
Manek, Kohls, Kelley, and Gallahar. Nayes: None. Motion carried.

Motion was made by Mr. Lay and seconded by Mr. Long based upon the written
documents presented for discussion, plus confidential information and discussion in
executive session, to declare Mr. Simpson’s death as a Death in the Line of Duty. Ayes:
Messrs. Duncan, Adams, Cassady, Freeman, Stone, Cramer, Lay, Long,
Manek, Kohls, Kelley, and Gallahar. Nayes: None. Motion carried.

ROBERT JONES/EXECUTIVE DIRECTOR REPORT:

Mr. Jones reported that there were only seven Cities that kept their Local Pension Board.

Mr. Jones said there had been no response in regards to the Audit from the Oak Grove
Fire Department and that staff would continue trying to contact the Fire Chief.

Mr. Jones said with regards to the Audit of the Jenks Fire Department that the city
cancelled the appointment to commence the audit and challenged the system’s authority
to conduct such an audit.

QUESTIONS & COMMENTS FROM BOARD MEMBERS & AUDIENCE:

OLD BUSINESS:

NEW BUSINESS:

NEXT MEETING DATE:

The Oklahoma Firefighters Pension and Retirement Board will meet February 17, 2017 at
8:30 A.M. at the Salvation Army Building, 6601 Broadway Extension, Ste. 100,
Oklahoma City, OK.

ADJOURNMENT:

Chairman Michel Duncan adjourned the Board meeting at

Submitted by Terri L. Williams, Executive Secretary.


_________________________________
Oklahoma Firefighters Pension System
January 20, 2017
Page 8
_________________________________
Oklahoma Firefighters Pension System
January 20, 2017
Page 9
P.O. Box 10841
Eugene, Oregon 97440
p/f: 541.257.8878
info@t1df.org
February 27, 2018
www.t1df.org

Office of Open Records


333 Market Street, 16th Floor
Harrisburg, PA 17101-2234

Sent via online appeal filing system at http://www.openrecords.pa.gov/Appeals/AppealForm.cfm

IN RE: Charles Fournier (T1DF) v. Lehigh County Employees Retirement System, OOR Dkt.
AP 2018-0343

To Whom It May Concern:

I am the president of the Type 1 Diabetes Defense Foundation (T1DF). I am filing this appeal on
my behalf and on behalf of T1DF. I will refer to T1DF and myself as “we” or “us” or “our” or “Boss/
T1DF.”

On February 27, 2018, the Office of Open Records (“OOR”), upon review of the appeal filed by us
on February 23, 2018 (see above-referenced docket number), correctly determined that the
appeal was deficient solely based on the date the appeal was filed. OOR did not address whether
the appeal itself had any substantive merit. We will not appeal or petition for review of this
decision, as it was proper.

This appeal solely addresses the substantive content of the response to our request issued by
Lehigh County (“County”) under RTKL on or about February 21, 2018 (actual mailing date), and
received by us on or about February 26, 2018.

Under ❡407 of Lehigh County’s Home Rule Charter (Attachment K), the County Solicitor must
receive express authorization by the Board of Commissioners to hire a law firm as outside counsel.
(Attachment K): “No other official or agency shall employ other legal counsel except as may be
permitted by law or by the Charter without the approval of the Board.” ❡407(a) “With the approval
of the County Executive and the Board, the County Solicitor may retain special counsel for a
particular proceeding.” ❡407(b)

Page 1 of 17
We requested records documenting the above-mentioned approval in relation to the
appointment of outside counsel for a specifically identified proceeding started on January 11,
2017, in a federal court of New Jersey.

On February 20, 2018, Lehigh County summarily refused to promptly disclose, in good faith, the
requested records likely kept in the litigation file of the Law Department and gave no specific
reason excusing non-performance or justifying the time extension sought.

We are therefore appealing both the County’s non-performance and the County’s failure to
provide any reason excusing non-performance. We are respectfully requesting that OOR find the
County’s response to be a deemed denial, that the County be ordered to comply with the
substantive and procedural due process requirements of the Right To Know Law (RTKL) and that
the County be ordered immediately to make a good faith effort to produce promptly all records,
responsive to our request, that are not subject to a specific exception.

PROCEDURAL HISTORY

On February 15, 2018, we filed a formal request for records with the Open Records Officer of
Lehigh County, Pennsylvania (Attachment A). In addition to the request form (Attachment B), we
attached three additional documents: the securities lawsuit filed on behalf of Lehigh County
Employees’ Retirement System or “Plan” (for reference), a screenshot of a related request
previously made on February 10, 2018 (superseded by this formal request) and an email to a law
firm regarding a phone call we received on February 14, 2018, regarding this prior request.

The purpose of this request is to obtain the official records documenting the appoint of outside
counsel and other authorizations required for the filing of a lawsuit on behalf of Lehigh County
Employees’ Retirement System and related disclosure of confidential Plan information. On or
about January 11, 2017, a securities lawsuit was filed by James Cecchi, an attorney with the law
firm CARELLA, BYRNE, CECCHI, OLSTEIN, BRODY & AGNELLO, P.C. (5 Becker Farm Road
Roseland, New Jersey 07068) supposedly as Liaison Counsel for Plaintiff Lehigh County
Employees’ Retirement System, and by the law firm BERNSTEIN LITOWITZ BERGER &
GROSSMANN LLP (1251 Avenue of the Americas New York, New York 10020) (“BLBG”)
supposedly as Counsel for Plaintiff Lehigh County Employees’ Retirement System. This securities
lawsuit, filed in New Jersey federal district court, is identified as Lehigh County Employees’
Retirement System vs. Novo Nordisk, Case No. Case 3:17-cv-00209 (BRM) (LHG).

Page 2 of 17
Under ❡407 of Lehigh County’s Home Rule Charter (Attachment K), the County Solicitor must
receive express authorization by the Board of Commissioners to hire a law firm as outside counsel.
(Attachment K): “No other official or agency shall employ other legal counsel except as may be
permitted by law or by the Charter without the approval of the Board.” ❡407(a) “With the approval
of the County Executive and the Board, the County Solicitor may retain special counsel for a
particular proceeding.” ❡407(b) We researched all meeting minutes and public records available
via the websites of Lehigh County’s agencies and departments for the period between January
2015 and May 2017. We could not find any public record referring to this lawsuit, authorizing the
start of this lawsuit, appointing outside legal counsel to file such a lawsuit or authorizing the
disclosure of confidential Plan investment information.

Such historical records documenting the decision to proceed with this lawsuit and the
appointment of outside counsel1 could be in the custody of four (4) departments/agencies:

1. Board of County Commissioners;


2. Office of the Lehigh County Controller;
3. Department of Law/County Solicitor; and
4. Retirement Board of the Lehigh County Employees' Retirement System (Retirement System,
Pension Plan, or Plan).

We therefore submitted five (5) requests for records, one request for each department/agency
plus a fifth request addressing the possibility that these matters were discussed during closed-
door executive meetings.

The type of records sought are records usually and customarily produced by covered agents to
document the usual performance of their public duties in compliance with local and State laws.
For example, the Oklahoma Firefighters Pension and Retirement Board met January 20, 2017, to
discuss the filing of the above-mentioned lawsuit and related appointment of counsel (see
Attachment D, item 9(a) on page 4). A Plan, local or State agency subject to RTKL does not file
‘secret’ lawsuits against international pharmaceutical companies. At a minimum, the official
records authorizing the Law Department to proceed with this lawsuit should be kept in the
litigation files maintained by the County Solicitor.

1 We are not seeking confidential documents protected under the attorney work-product or attorney-client
privileges. The documents we are requesting are public records documenting the decision to proceed with the
lawsuit and the appointment of counsel.

Page 3 of 17
On Thursday, February 15, 2018, the request form (and its attachments) was read at 3:56:35 pm
EST by Judith M Johnston (JudithJohnston@lehighcounty.org). Ms. Johnston is the County’s
public information officer. See: http://www.openrecords.pa.gov/Documents/RTKL/AORO_List-
County_Municipal.pdf. Lehigh County, its law department, its Board of Commissioners, its Office
of the Controller, the Lehigh County Employees’ Retirement System (Retirement System, Pension
Plan, or Plan) and its board had 5 days to produce all or part of the requested documents. As
stated above, most of these documents should be kept by the Law Department in its litigation
files.

On or about February 20, 2018, Ms. Johnston drafted Lehigh County’s response. The letter was
effectively mailed on February 21, 2018 (see Attachment E). The County thus responded after
fewer than 2.5 business days. The response did not include any documents. The response merely
stated that “[Ms. Johnston] is reviewing [our] request, pursuant to and in and accordance with
Section 102, 708 and 902 (a) (1), (2), (4), (7) of the Pennsylvania Right to Know Law… I will provide
you with a written response, approving or denying [our] request… on or before March 26, 2018.”

SUMMARY OF APPEAL

We are appealing Lehigh County’s unsupported delay for producing part or all of the requested
documents and its inadequate reliance on an enumeration of clauses without any substantiation
for seeking a 30-day time extension—when at least part of the records sought by this request
should be readily available. The County failed to respond within the meaning of Section 901 and
902. This non-response was issued in bad faith, despite a de facto 5-day extension.

Our appeal broadly relies on two decisions, Dep’t of Corr. v. Fiorillo, 2017 Pa. Commw. Unpub.
LEXIS 305 (addressing the test for privileged documents) (Attachment F) and Office of the
Governor v. Donahue and OOR, 98 A.3d 1223 (Pa. 2014) (addressing an agency’s time frame for
responding to written requests for documents) (Attachment G). Other decisions from Pennsylvania
courts and OOR apply.

We respectfully request that OOR:

(A) find Lehigh County in breach of its duty to promptly disclose, in good faith, responsive records
under Pennsylvania’s Right to Know Laws, and

(B) order the County and its agencies

Page 4 of 17
(1) to immediately identify and disclose all available public records responsive to the request
and,

(2) if any specific records fall under an enumerated exception, (a) identity the document with
specificity, (b) provide a substantive rationale for the presumption of privilege, identifying
the specific exemption the County relies upon for withholding release of that specific
document, and (c) provide a schedule for the final decision regarding the release of each
of these documents (documents should be released as soon as cleared by the competent
authority, in the most time-effective manner).

BASIS OF APPEAL

The County’s three-line response, issued after only one day, breached Section 901 (good
faith effort, prompt disclosure) and 902 (reasons, reasonable date)

Lehigh County, its Law Department, its Board of Commissioners, its Office of the Controller, the
Lehigh County Employees’ Retirement System (Retirement System, Pension Plan, or Plan) and its
board are covered agencies. A covered agency is required to respond to a request as promptly as
possible under the circumstances, which shall not exceed five business days—not 5 business days
plus 30 days.

Section 902(b)(2) requires that the notice include the reason for the review and a reasonable date
that a response is expected to be provided. As described above, Lehigh County provided no
reason for the extended review and made no determination as to the basis for the de facto time
extension. Ms. Johnston’s response treats the 30-day extension as the time for response, thus
making a joke of the 5 business days stipulated in Section 901. Section 901 requires that the
agency respond within 5 business days unless one of the specific grounds stated under Section
901(a) is shown to apply to a specific document or information. The County instead turns the RTK
framework on its head, treating the time extension as a right that does not need to be
substantively justified, i.e. a mandate to delay and obfuscate disclosure.

As discussed in Attachment G, 65 P.S. § 67.901 addresses an agency’s time frame for responding
to written requests for documents made pursuant to the Right-to-Know Law. Pursuant to 65 P.S. §
67.901, an agency must respond to a Right-to-Know Law records request within five business days
of receipt of the request by the agency’s respective open-records officer. Section 901 of the RTKL
directs agencies to make a good faith effort to respond as promptly as possible, and in any event

Page 5 of 17
to respond no later than “five business days from the date the written request is received by the
open-records officer for an agency.” 65 P.S. § 67.901. Section 901 provides more fully:

Upon receipt of a written request for access to a record, an agency shall make a good
faith effort . . . to respond as promptly as possible under the circumstances existing at
the time of the request . . . . The time for response shall not exceed five business days
from the date the written request is received by the open-records officer for an agency. If
the agency fails to send the response within five business days of receipt of the written
request for access, the written request for access shall be deemed denied. Id. (emphasis
added).

Courts have found the language of this passage is clear and unambiguous. Simply put, agencies
must respond to RTKL record requests within five business days after the agencies’ respective
open-records officer first receives the request. The five business day period plainly begins when
the open-records officer receives a request. (Appeal from the Order of Commonwealth : Court at
No. 376 MD 2012 dated January : 23, 2013, p. 27)

To effectuate the legislative intent for broader public access, “[C]ourts should liberally construe
the RTKL, to effectuate its purpose of promoting ‘access to official government information in
order to prohibit secrets, scrutinize actions of public officials, and make public officials
accountable for their actions.’” Allegheny County Department of Administrative Services v. A
Second Chance, Inc., 13 A.3d 1025, 1034 (Pa. Cmwlth. 2011) (citation omitted).

According to OOR, the plain language of Section 901 requires that an agency respond to all RTKL
record requests within five business days of receipt by any agency employee. Moreover, OOR has
argued that the Commonwealth Court adopted an overly narrow interpretation of Section 901,
specifically with regard to the language from Section 901 that reads: “[t]he time for respon[ding to
a records request] shall not exceed five business days from the date the written request is
received by the open-records officer for an agency.” Office of the Governor v. Donahue and OOR,
98 A.3d 1223, 22 (Pa. 2014) (recital of facts). In this case, OOR contended that an open-records
officer’s duties are merely administrative while it is the agency that performs all critical decision-
making functions with respect to the RTKL, and reasons that the five business day period for
responding to a RTKL request necessarily begins to run when any agency employee first receives
the request.

Page 6 of 17
We gave advance notice of our request when we contacted Lehigh County’s Law Department
directly on February 10, 2018. (See second to last page of Attachment B.) In this matter, the
County’s Law Department, the agency most concerned with our request, had thus received a
similar, although much briefer, request from us five calendar days prior to the issuance of our
formal request. The Agency acted upon our February 10 request on or about February 14, 2018.
But instead of receiving a formal response or the requested documents, Charles Fournier of T1DF
received a call from the above-mentioned law firm, BLBG. Ms. Sinderson inquired during that call
regarding the motive for requesting County records pertaining to appointment of outside
counsel.2

Based on OOR’s opinion and understanding of RTKL, the Agency had advance notice of our
request. The February 15, 2018, formal request superseded this earlier request and expanded on
it; it did not change its subject matter. Both the February 10 and February 15 requests concern the
same law firms, the same lawsuits and, broadly speaking, the same records.

The County de facto already received a 5 business day time extension. It thus had 10 business
days to respond to a simple request the Law Department could have partially addressed just by
identifying the reference number and content of the litigation file pertaining to the above
mentioned lawsuit filed by BLBG, on behalf of the Plan, on January 11, 2017. Pursuant to the plain
language of Section 901 of the RTKL, Lehigh County must respond to RTKL record requests within
five business days of the request’s receipt by the agency’s open-records officer. Office of the
Governor v. Donahue and OOR, 98 A.3d 1223, 22 (Pa. 2014). Under the circumstance of this
matter, the 3-line, one sentence response included in the letter dated February 20, 2018
(Attachment E), can’t be deemed a ‘response’ pursuant to the plain language of Section 901 and
other substantive due process requirements of RTKL. It is a non-response.

Lehigh County made no good faith effort to comply with any of the procedural and substantive
requirements of RTK laws. After spending a single day reviewing our request, Lehigh County
wrote a three-line response that merely cites three section numbers and promises some form of
response in the future. Lehigh County does not represent that its circumstances at the time of the
request would have prevented the County from identifying and producing any document. Nor

2 It is our contention that the County’s outreach to this law firm regarding our RTKL request might have been
improper since BLBG has not been appointed outside counsel for the purpose of advising the County on RTKL
requests. We reserve our rights to bring related claims against the County, Ms. Roseberry and BLBG in relation to
this matter.

Page 7 of 17
does the County actually represent that the request is overly complex, vague or burdensome (and
as discussed above, it is not).

The County failed to provide any substantiation for not disclosing any document within 5
business days, in breach of Section 902

The County’s single-sentence, three-line response should be deemed a non-response. If it is


deemed a response, it should then be deemed a denial.

Section 902(b)(2) requires that the notice include the reason for the review. The County’s response
provided no reason whatsoever. Merely listing a Section number does not fulfill the requirements
of Section 902(b)(2), especially when the Section in question provides 30 possible reasons. The
County had 5 business days to attempt, in good faith, to identify, retrieve and disclose the
requested documents — or to provide reasons for not being able to do so. The County made no
good faith effort to comply with either of its duties under RTK laws.

The County’s complete substantive response, after a single day of review, was a single sentence:

“Please be advised that I am reviewing your request, pursuant to and in and accordance
with Section 102, 708 and 902(a)(1), (2), (4), (7) of the Pennsylvania Right To Know Law, and
how long it will take to produce the requested material in the event it is a public record
and not subject to one of the enumerated exceptions set forth in the Right To Know Law.”

This response only documents the County’s bad faith. First, a review must be conducted in
accordance to and pursuant to all Sections of the RTK laws, including Section 901. The County is
obviously not entitled to pick and chose. Second, this single sentence failed to identify any basis
excusing non-performance and for justifying the 30 business day delay it de facto requested. We
are left guessing as to what the County’s reason could be for responding after a single day and for
not identifying any responsive records. We therefore reject this request for time extension, made
in bad faith, and request immediate performance as mandated by RTK laws (RTKL).

The RTKL are remedial in nature and were “designed to promote access to official government
information in order to prohibit secrets, scrutinize the actions of public officials, and make public
officials accountable for their actions,” Pennsylvania State Police v. McGill, 83 A.3d 476, 479 (Pa.
Cmwlth. 2014). In evaluating whether a record is exempt from disclosure, the exemptions must be
narrowly construed so as not to frustrate the RTKL’s remedial purpose, Office of Governor v.

Page 8 of 17
Scolforo, 65 A.3d at 1100 (Pa. Cmwlth. 2013). However, mere conclusory statements alone, or in
this case RTKL Section numbers, do not satisfy the substantive due process requirement of RTKL,
including the burden of proof an agency must sustain to show that a request may be delayed or
that a requester may be denied access to records. See, e.g., Dep’t of Corr. v. Fiorillo, 2017 Pa.
Commw. Unpub. LEXIS 305, 5 citing McGowan v. Pa. Dep’t of Envtl. Prot., 103 A.3d 374, 381 (Pa.
Cmwlth. 2014); Heavens v. Pa. Dep’t of Envtl. Prot., 65 A.3d 1069, 1074 (Pa. Cmwlth. 2013). In the
present case, the County did not even produce any affidavits that provide justification for any
claimed reasons excusing non-performance of the prompt disclosure requirements of Section
901.

More specifically:

Section 102 provides definitions. Ms. Johnston’s specific reference to this Section as a basis for
withholding release of all requested documents is unclear and can’t be assessed. We are
therefore broadly and generally rejecting Section 102 as a Section providing any substantive
ground for withholding the requested documents.

Section 708 (b) provides approximately 30 different grounds for exemption from disclosure. The
response from Ms. Johnston does not identify any specific ground among these 30 possible
exceptions that would excuse the County from disclosing the requested documents within 5
business days. The County must make a good faith effort to disclose the requested documents or,
at a minimum, to provide reasons for excusing its non-performance. In the present case, we are
left guessing as to what these reasons might be.

Under 708 (a), there is a rebuttable presumption that all records held by local agencies are public.
Under Section 305(a), there is a presumption that all records (as defined by RTKL) in the
possession of a covered agency are public records unless: (1) the record is exempt under Section
708; (2) the record is protected by a privilege; or (3) the record is exempt from disclosure under
any other federal or state law or regulation or judicial order or decree. 65 P.S. § 67.305(a). The
burden falls on the covered agency to prove, by a preponderance of the evidence, that the
record is exempt from disclosure. Section 708(a)(1) of the RTKL, 65 P.S. § 67.708(a)(1). See Dep’t of
Corr. v. Fiorillo, 2017 Pa. Commw. Unpub. LEXIS 305, 4.

The burden of proving that a record is non-public, that an exemption applies or that a specific
reason excuses non-disclosure within 5 business days is on the agency denying access. When

Page 9 of 17
doing so, the County must meet all the required elements, not some. See, e.g., Dep’t of Corr. v.
Fiorillo, 2017 Pa. Commw. Unpub. LEXIS 305, 6, citing Pa. Dep’t of Educ. v. Bagwell, 114 A.3d 1113,
1123 (Pa. Cmwlth. 2015) (stating that the inability to establish any of the three elements required
to assert an exemption bars application of the exemption).

The County’s response, comprising a single sentence, obviously failed to meet these procedural
and substantive due process requirements. Lehigh County is de facto denying access beyond the
mandatory five (5) business days without providing any ground for such denial. Some of the
requested records might fall under a listed exception, in which case the County will have to meet
its substantive due process requirements. Most records responsive to this request should not fall
under any of the listed exceptions.

We are requesting proof that a matter has been officially reviewed, that the required authorization
and delegation have been duly given by competent authorities, and that outside counsel has
been appointed in compliance with applicable public procurement regulations. An example of a
record that would have been responsive to our request has been provided as Attachment D.

No exemption from disclosure exists under federal or state law for most of the requested
documents. We are not asking for drafts or records reflecting internal, predecisional deliberations
of county agencies, correspondence or bid/proposal documents, etc. Most of the requested
records should not be internal, predecisional deliberations (although some might). They are not
protected by attorney-client privilege: they are factual information regarding the existence of an
appointment of outside counsel and its circumstances (see Attachment D for an example of such a
factual record). Appointments of legal counsel are not “confidential deliberations of law or
policymaking, reflecting opinions, recommendations or advice.” The attached meeting minutes of
Lehigh County’s Board of Commissioners (Attachment I) document that appointment of outside
counsel is a general business matter discussed during public meetings.

We are not requesting factual information that may reflect the deliberative process leading to that
appointment, although some of the records responsive to our request might reflect that
deliberative process (these should be identified). We are just seeking factual information related
to the existence of appointment of outside counsel for the purpose of filing a specific lawsuit.
Similarly, we are not requesting any document subsequently issued in the course of the legal
representation itself—if such a client-attorney relationship was ever established. Since usual
business of the agencies is subject to public scrutiny, there is no presumption of privilege

Page 10 of 17
regarding usual business decisions. And even in the case that the appointment had been made
during a closed-door meeting, the presumption is still in favor of disclosure unless the County
demonstrates the existence of a privilege. This would be a departure from the County’s standard
business procedure. Professional Services Agreements for legal services are documented during
public meetings. See, e.g. the appointment of Stevens & Lee, P.C., a full-service law firm, as
outside counsel as documented in the January 25, 2016, meeting minutes of Lehigh County (page
3) (Attachment I) Pursuant to ❡407(b) of Lehigh County’s Home Rule Charter (Attachment K), the
County Solicitor must receive express authorization by the Board of Commissioners to hire a law
firm as outside counsel. Similarly, the appointment of the above-mentioned law firms in relation to
the securities case filed on January 11, 2017, should have been authorized by the Board, and such
an authorization should have been memorialized in the form of a written record.

Some of the requested documents might also be protected from disclosure due to a legal
privilege under either attorney-client or work product doctrine. The public nature of the County’s
board meeting would de facto waive such a privilege. RTKL requires that this privilege be narrowly
applied. An engagement contract is not attorney work product as it does not (or should not)
contain legal advice of any nature. Similarly, the existence of an appointment and the delegation
of authority required under the County Home Charter Rules to effect such an appointment pre-
dates the formation of a client-attorney relationship and thus would typically only involve
correspondence and records between County entities and/or employees. We are not seeking
correspondence between covered agencies and appointed outside/special legal counsel.

“The attorney-client privilege protects only those who are seeking legal advice; it ‘does not extend
to business advice or protect clients from factual investigations.’” California University of Pa. v.
Schackner, 2017 Pa. Commw. LEXIS 617, 13. But where an agency fears that attempting to meet
the proof requirements of Bagwell or any other disclosure/evidentiary requirement might tend to
disclose aspects of privileged communication, privileged work product, potential litigation or
legal strategy, in camera review by OOR is an alternative to risking such disclosure by submitting
evidence. Id, 15-16. Despite the fact that the County had 10 days to review the content of a single
litigation file, no record potentially subject to a privilege has been specifically identified and no
request for in camera review has been made.

Ms. Johnston has made no determination that a specific exception actually applies to any specific
record or records. She merely listed the section numbers en bloc. Her response does not actually

Page 11 of 17
state that any requested record is not subject to access. Listing the Section numbers is not a basis
for denying access to all records.

Section 902(a)(1) states that the “agency shall determine if… the request for access requires
redaction of a record in accordance with section 706.” But Section 706 states that “the agency’s
response shall grant access to the information which is subject to access… The agency may not
deny access to the record if the information which is not subject to access is able to be redacted.”
Ms. Johnston has made no such determination. She merely listed the section number. Her
response does not actually state that any of the requested records contain information which is
not subject to access. Listing the Section number is not a basis for denying access to all records.

Section 902(a)(2) states that “agency shall determine if… the request for access requires the
retrieval of a record stored in a remote location.” Ms. Johnston has made no such determination.
The County’s response does not identify any document stored in a remote location. The above
mentioned lawsuit is an ongoing matter. It was filed about a year ago. It is unlikely that the
litigation file for this matter has been archived, and the Law Department isn’t a ‘remote location.’ It
is located in the same building as Ms. Johnston’s office. Ms. Johnston’s response merely lists this
section number. Should a document be stored in a remote location, a fact the County has not
even alleged, this determination would only delay access to that specific document. Listing the
Section number is not a basis for denying access to all records.

Section 902(a)(4) states that “agency shall determine if… a legal review is necessary to determine
whether the record is a record subject to access.” Ms. Johnston has made no such determination.
The County’s response does not identify any document requiring a legal review. Ms. Johnston’s
response merely lists this section number. Should a specific document require legal review, a fact
the County has not even alleged, this determination would only delay access to that specific
document. Listing the Section number is not a basis for denying access to all records.

Furthermore, we provided an example of the kind of document that would be responsive to our
request (Attachment D). Meeting minutes are not attorney work product subject to a privilege—
they are County management documents. County meetings are open to the public; there is no
expectation of privilege or confidentiality. Furthermore, we are only asking for proof that the
above-mentioned law firm and County officials who retained them had actual authority to file a
lawsuit. This inquiry focuses on the transactional aspect of appointment of outside counsel, not
attorney work product. We do expect that some of the requested documents/records will need

Page 12 of 17
legal review and might also need redaction. But the County made no good faith effort to identify
these documents and, as required under 65 P.S. § 67.901, to promptly disclose the documents not
subject to legal review.

Section 902(a)(7) states that “agency shall determine if… the extent or nature of the request
precludes a response within the required time period” (5 business days). Ms. Johnston has made
no such determination and responded after only 2.5 business days. The County’s response does
not identify any basis for delaying access to all documents.

Our request is quite simple, as it pertains to a specific requirement under the County Home Rule
Charter — the requirement that the County Solicitor seek authorization to appoint outside counsel.
The Law Department is the only covered agency authorized to appoint outside or special counsel
(although other covered agencies might be involved, as the litigation in question required
disclosure of certain confidential investment data from the Plan). In our request, we thus “identify
or describe the records sought with sufficient specificity to enable the agency to ascertain which
records are being requested” (Section 703 of the RTKL). Our request is not open-ended,
burdensome, or overly broad (“[a]n open-ended request that gives an agency little guidance
regarding what to look for may be so burdensome that it will be considered overly broad” Pa.
Dep’t of Educ. v. Pittsburgh Post-Gazette, 119 A.3d 1121, 4 (Pa. Commw. Ct. 2015)).

Our request meets the three-part balancing test set by Pennsylvania courts. See, e.g., Id at 4 (citing
Carey v. Dep’t of Corr., 61 A.3d 367, 372 (Pa. Cmwlth. 2013)). The subject matter of our request
must identify the “transaction or activity” of the agency for which the record is sought
(appointment of BLBG for the purpose of filing a specific lawsuit actually filed on January 11,
2017, in N.J. Federal Court). The scope of our request identifies “a discrete group of documents”
by type and by recipient.

We are seeking records related to an authorization that should have been provided by the County
Board of Commissioners, according to the County Home Rule Charter. The records we are
seeking are typically meeting minutes (See, e.g., Attachments D, I, J). We identified the 5 covered
agencies that might have a copy of these records. It is quite easy to assess whether a record is or
is not related to appointment of legal counsel to file a securities lawsuit against Novo Nordisk, AG.
The County’s Home Rule Charter also specifically identifies a type of responsive document under
❡407.

Page 13 of 17
Finally, we provided a timeframe by virtue of identifying the transaction that gave rise to the
request (the January 11, 2017, filing of a securities lawsuit). Due to the secrecy surrounding this
matter, it is impossible to asses whether the requested records could have been issued at a
specific date between 2015 and January 2017. “The timeframe prong is, however, the most fluid
of the three prongs, and whether or not the request’s timeframe is narrow enough is generally
dependent upon the specificity of the request’s subject matter and scope.” Pa. Dep’t of Educ. v.
Pittsburgh Post-Gazette, at 6. As stated in our request, page 4: “We have checked all board
meeting minutes of the Retirement Board and Board of County Commissioners in 2015, 2016 and
2017 and could not find any reference to the above matter. We are therefore not able to provide a
more specific description of the County records we are seeking.” Our request thus suggests a
timeframe. But due to the County’s secrecy regarding this matter, we could not provide a more
finite description. Our failure to identify a finite timeframe does not, however, render our
otherwise sufficiently specific request overbroad (Id at 7).

All or most of the requested documents should be centrally archived in the litigation file of the
Law Department — the only covered agency authorized to appoint outside/legal counsel. An initial
step towards satisfying the good faith requirement of RTKL would have been to identify the
litigation file reference number, review the contents of such file for responsive, non-privileged
documents such as the Board’s authorization to proceed with said appointment of special
counsel, and then to inform us whether the content of such file is responsive to our request.

Even if this request were slightly more complex, Ms. Johnston would still have to determine with
some specificity that she does not have the physical and staffing capabilities to substantially
comply with it within the required 5 business days. She did not even attempt to comply, as she
summarily refused compliance after only 2 business days—Ms. Johnston read our request on
Friday and then drafted her response on Monday without expending any effort in furtherance of
her affirmative duty to disclose. Listing the Section numbers is not a basis for denying access to all
records within the required 5 business days.

We also note that Ms. Johnston’s three-line response does not represent that her office has a
staffing problem or that their current workload prevents her from reviewing our request and
checking with Ms. Roseberry, senior legal counsel with the County Law Department, whether the
requested records exist. Ms. Roseberry apparently had time to contact, on or before February 14,
2018, BLBG legal staff regarding our request. She therefore had sufficient time to comply with our

Page 14 of 17
RTKL request and provide Ms. Johnston, on or before February 20, 2018, a definite answer
regarding the existence, location and nature of all or part of the requested records.

Finally, it seems possible that no formal authorization has been issued under Section 407 of the
County’s Home Rule Charter and that the Law Department proceeded with appointing outside
counsel sua sponte, based on the County Solicitor’s apparent rather than actual authority to do so.
Such a determination can easily be reached by asking the County Solicitor whether such an
authorization has indeed been issued. In the event that no record exists, the County still bears,
under the RTKL, “the burden of demonstrating that it has reasonably searched its records to
establish that a record does not exist.” Borough of Paxtang v. Hoyer, 2017 Pa. Commw. Unpub.
LEXIS 145, 6 (citing Department of Labor and Industry v. Earley, 126 A.3d 355, 357 (Pa. Cmwlth.
2015)). The County made no such statement and issued no affidavit as evidence of the non-
existence of the requested records.

The County’s failure to respond is a deemed denial or the County’s response is a deemed
denial—either option gives ground for this Appeal

Section 1101(a)(1) provides that, if “a written request for access to a record is denied or deemed
denied, the requester may file an appeal with the [OOR] . . . within 15 business days.” 65 P.S. §
67.1101(a)(1). “The appeal shall state the grounds upon which the requester asserts that the
record is a public record . . . and shall address any grounds stated by the agency for . . . denying
the request.” Id.

The RTKL mandate for transparency and prompt response, made in good faith, would be nullified
if the procedural and substantive requirement of RTKL could be met with a single sentence, three-
line response that, after 7.5 business days for review, fails to identify any specific records and to
state any specific ground for excusing non-performance and thus supporting a de facto request
for an additional 30-day time extension.

As required by Section 1101(a) of the RTKL, we specify in this appeal to OOR the particular
defects in an agency’s stated reasons, or absence of reason, for de facto denying a RTKL request
as it pertains to documents that should have been disclosed after the 10 business day review. For
the reasons stated above, our request should be deemed denied and this appeal, filed within 15
business days of the deemed denial, should be reviewed.

Page 15 of 17
CONCLUSION

Absent of any specific ground that would excuse the County’s non-compliance (prompt response
within 5 business days), the County’s letter should be construed as a deemed denial. To accept
the County’s one-sentence response as a substantive response under RTKL would make a
mockery of RTKL requirement to respond within 5 business days. Lehigh County’s abuse of due
process, in breach of the letter but also the spirit of RTKL, should not be tolerated by OOR.

We therefore respectfully request, as stated above, that OOR find Lehigh County’s non-response
to be a deemed denial subject to appeal, that OOR reject the County’s request for time extension
until the County provides actual evidence it needs such an extension of time, and that OOR order
prompt compliance with the substantive and procedural requirements of the Pennsylvania Right
to Know Laws, e.g. at least disclosure of the records that are responsive and immediately
available.

Respectfully submitted,

Julia Boss, individually and o/b/o the Type 1 Diabetes Defense Foundation (T1DF)
President
Type 1 Diabetes Defense Foundation

Attachements:

A. T1DF email to Lehigh County’s Open Records Officer (forwarding our RTKL request), dated
February 15, 2018.
B. T1DF’s RTKL Request Form dated February 15, 2018.
C. Email server delivery and read confirmation dated February 15, 2018.
D. Minutes of the Oklahoma Firefighters Pension and Retirement Board’s meeting on January 20,
2017.
E. Letter from Lehigh County dated February 20, 2018.
F. Dep’t of Corr. v. Fiorillo, 2017 Pa. Commw. Unpub. LEXIS 305.
G. Office of the Governor v. Donahue and OOR, 98 A.3d 1223 (Pa. 2014).
H. NOT USED
I. Minutes of the April 23, 2014 meeting of the Lehigh County Board of Commissioners.

Page 16 of 17
J. Minutes of the January 25, 2017 meeting of the Lehigh County Board of Commissioners.
K. Lehigh County Home Rule Charter.

Page 17 of 17
LEHIGH COUNTY RIGHT-TO-KNOW REQUEST FORM DATE REQUESTED: February 15, 2018

REQUEST SUBMITTED BY: E-MAIL (charles.fournier@t1df.org)

NAME OF REQUESTOR : Charles Fournier, o/b/o Type 1 Diabetes Defense Foundation


(T1DF)

STREET ADDRESS : 3059 Hendricks Hill Drive

CITY/STATE/COUNTY (Required): Eugene, OR 97403

TELEPHONE (Optional): 206 643 1479

RECORDS REQUESTED:

*Provide as much specific detail as possible so the agency can identify the information.

This request concerns the records of four agencies:

(1) Board of County Commissioners;


(2) Office of the Lehigh County Controller;
(3) Department of Law / County Solicitor; and
(4) Retirement Board of the Lehigh County Employees' Retirement System (Retirement
System, Pension Plan, or Plan).

The purpose of this request is to obtain the official records documenting the appoint of
outside counsel and other authorizations required for the filling of a lawsuit on behalf of
Lehigh County Employees’ Retirement System and related disclosure of confidential Plan
information.

Page 1 of 4
On or about January 11, 2017, a securities lawsuit was filed by James Cecchi, CARELLA,
BYRNE, CECCHI, OLSTEIN, BRODY & AGNELLO, P.C. (5 Becker Farm Road Roseland, New
Jersey 07068) as Liaison Counsel for Plaintiff Lehigh County Employees’ Retirement System
and by BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP (1251 Avenue of the Americas
New York, New York 10020) as Counsel for Plaintiff Lehigh County Employees’ Retirement
System. This securities lawsuit, filed in New Jersey federal district court is identified as Lehigh
County Employees’ Retirement System vs. Novo Nordisk, Case No. Case 3:17-cv-00209 (BRM)
(LHG).

When the request below refers to ‘outside counsel,’ that means either or both of the above-
mentioned law firms. When the request below refers to ‘lawsuit,’ that means all the tasks
required for the preparation and filing of the lawsuit as well as the law suit that was ultimately
filed on January 11, 2017, in New Jersey Federal District Court as Lehigh County Employees’
Retirement System vs. Novo Nordisk, Case No. Case 3:17-cv-00209 (BRM)(LHG).

A certification was signed by Matthew R. Sorrentino, County Solicitor of Lehigh County, on


behalf of Lehigh County Employees’ Retirement System (“Lehigh County”) on January 10,
2017 (attached). This certificate does not clarify whether Mr. Sorrentino had actual authority
on January 10, 2017, to bind Lehigh County and whether the above-mentioned law firms
have been duly appointed as outside counsel and this action authorized by an act of the
County’s agencies that has oversight authority over this matter — Board of County
Commissioner, Retirement Board, Office of the Controller, and Law Department.

The purpose of this request is to obtain a copy of the written acts and documents of Lehigh
County that authorized appointment of BERNSTEIN LITOWITZ BERGER & GROSSMANN as
outside counsel of Lehigh County for the purpose of filing a securities class action against
Novo Nordisk as well as the acts/documents authorizing disclosure of confidential Plan
information. This lawsuit engages Lehigh County and Lehigh County Employees’ Retirement
System and required disclosure of confidential investment information to third parties that are
not County employees.

Under the Lehigh County Home Rule Charter (as amended) and the County Pension Law of
1971 (governing the operation of a retirement system for county employees), the Lehigh
County Retirement System is administered by a Retirement Board comprising of 7 members,
including the Controller and the County Executive. The Retirement Board—not the County
Commissioners, Controller or Solicitor—has plenary management and oversight authority
over the Plan, including the filing of securities lawsuits on the behalf of the Plan. These
matters should have therefore been documented and formally authorized by the Retirement
Board and Lehigh County.

Page 2 of 4
This request comprises of the following 5 requests:

• Request No. 1: Copy of the Board of County Commissioners’ minutes or decision that
allows the appointment of outside counsel and authorization to file a class action lawsuit on
behalf of Lehigh County. The Board of County Commissioners should have authorized
appointment of outside counsel and delegated the required authority to Mr. Sorrentino to
file this lawsuit and sign the complaint certification.

• Request No. 2: Copy of the Retirement Board’s minutes or decision that allows the
appointment of outside counsel, authorization to file a class action lawsuit on the behalf of
the plan, and disclosure of confidential plan information. The Retirement Board of the
Lehigh County Employees' Retirement System (Retirement System, Pension Plan, or Plan)
should have authorized the disclosure of confidential plan information and the filing of the
lawsuit as it could have negative impact on the plan’s performance.

• Request No. 3: Copy of the County Controller’s authorization or any other document
related to the appointment of outside counsel, filing of a class action lawsuit on behalf of
the plan and disclosure of confidential plan information. The Office of the County Controller
has oversight responsibilities over the plan. The County Controller may also have had to
issue a formal authorization to allow the disclosure of confidential plan investment
information to third parties who are not County employees.

• Request No. 4: Copy of the above-mentioned documents held by the Department of Law
as well as the Department of Law’s document authorizing appointment of outside counsel,
filing of the above-mentioned class action and disclosure of confidential plan information.
Department of Law/County Solicitor must have sought these authorizations in order to
proceed with the appointment of outside counsel, disclosure of confidential plan
information and finally filing of a securities lawsuit that makes very serious accusations
against a large pharmaceutical corporation, thus exposing Lehigh County to possible
liabilities if these accusations of price-fixing were found to have been made in bad faith.

• Request No. 5: It is unlikely but still possible that these matters were discussed during
closed-door executive meetings. If so, we are also requesting information about such
meetings including: date of these meetings, the list of parties involved in these meetings,
and a description of the non-public documents that authorized the above-mentioned
appointment of outside counsel, disclosure of confidential Plan information and filing of the
securities lawsuit against Novo Nordisk.

Page 3 of 4
T1DF is requesting a copy of the above-mentioned records. We have checked all board
meeting minutes of the Retirement Board and Board of County Commissioners in 2015, 2016
and 2017 and could not find any reference to the above matter. We are therefore not able to
provide a more specific description of the County records we are seeking.

This request is made under the Pennsylvania Right to Know Act.

The Act does not require that the request comply with a specific form. Agencies may fulfill
verbal, written or anonymous verbal or written requests for access to records (Section 702).
When made directly to an public employee other than the open records officer, the
employee of an agency shall forward the request for records to the open-records officer
(703).

On February 10, 2018, we forwarded, in writing, via Linkedin Inmail, a similar request to
Catharine Roseberry, Senior Legal Counsel at Lehigh County (attached). Ms. Roseberry did
not apparently comply with the Act. She forwarded our request to the law firm BERNSTEIN
LITOWITZ BERGER & GROSSMANN. This law firm contacted us directly and inquired
regarding this request without actual or apparent authority, from Lehigh County, to interfere
with a right-to-know request made to a Lehigh County Employee. T1DF may address this
breach of the Pennsylvania Right to Know Act under separate copy.

DO YOU WANT COPIES? YES

DO YOU WANT TO INSPECT THE RECORDS? (TBD after disclosure)

DO YOU WANT CERTIFIED COPIES OF RECORDS? NO


____________________________________________________________________________

RIGHT TO KNOW OFFICER:

DATE RECEIVED BY THE AGENCY:

AGENCY FIVE (5)-DAY RESPONSE DUE:

**Public bodies may fill anonymous verbal or written requests. If the requestor wishes to pursue the relief and
remedies provided for in this Act, the request must be in writing. (Section 702.) Written requests need not include an
explanation why information is sought or the intended use of the information unless otherwise required by law.
(Section 703.)

Page 4 of 4
Case 3:17-cv-00209-BRM-LHG Document 1 Filed 01/11/17 Page 1 of 24 PageID: 1

James E. Cecchi Gerald H. Silk


CARELLA, BYRNE, CECCHI, Hannah Ross
OLSTEIN, BRODY & AGNELLO, P.C. Avi Josefson
5 Becker Farm Road BERNSTEIN LITOWITZ BERGER
Roseland, New Jersey 07068 & GROSSMANN LLP
Telephone: (973) 994-1700 1251 Avenue of the Americas
New York, New York 10020
Liaison Counsel for Plaintiff Lehigh County Telephone: (212) 554-1400
Employees’ Retirement System
Counsel for Plaintiff Lehigh County Employees’
Retirement System

UNITED STATES DISTRICT COURT


DISTRICT OF NEW JERSEY

LEHIGH COUNTY EMPLOYEES’ Civil Action No.


RETIREMENT SYSTEM, on behalf of itself and
all others similarly situated,

Plaintiff,

v. COMPLAINT and DEMAND FOR


JURY TRIAL
NOVO NORDISK A/S, LARS REBIEN
SØRENSEN, and JESPER BRANDGAARD,

Defendants.

Plaintiff Lehigh County Employees’ Retirement System (“Plaintiff”), by and through its

counsel, alleges the following upon information and belief, except as to those allegations

concerning Plaintiff, which are alleged upon personal knowledge. Plaintiff’s information and

belief is based upon, inter alia, counsel’s investigation, which includes review and analysis of:

(a) regulatory filings made by Novo Nordisk A/S (“Novo Nordisk” or the “Company”) with the

United States Securities and Exchange Commission (“SEC”); (b) press releases and media

reports issued by and disseminated by the Company; (c) analyst reports concerning Novo

Nordisk; and (d) other public information regarding the Company.


Case 3:17-cv-00209-BRM-LHG Document 1 Filed 01/11/17 Page 2 of 24 PageID: 2

INTRODUCTION

1. This federal securities class action is brought on behalf of all those that purchased

Novo Nordisk American Depositary Receipts (“ADRs”) between April 30, 2015 and October 27,

2016, inclusive (the “Class Period”). The claims asserted herein are alleged against Novo

Nordisk and certain of the Company’s senior executives (collectively, “Defendants”), and arise

under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and

Rule 10b-5 promulgated thereunder.

2. Novo Nordisk is a pharmaceutical company focused on producing insulin and

other diabetes treatments. Other than Novo Nordisk, only a few other companies manufacture

insulin-based medicines, with the main players being Sanofi, Eli Lilly and Merck. To capitalize

on their dominant position in the market, the Company, together with Sanofi, Eli Lilly and

Merck, entered into a collusive agreement to increase the prices of their insulin drugs. Indeed,

the prices of these firms’ insulin products skyrocketed over the past decade in a suspiciously

close and synchronized manner.

3. Throughout the Class Period, Defendants reported impressive revenue, operating

profit growth and sales growth. In addition, Novo Nordisk told investors that the Company

would achieve sales and operating profit growth of between 5% and 9% in 2016, as well as 10%

operating profit growth over the long-term. Further, while certain of Novo Nordisk’s

competitors acknowledged that revenue from their insulin franchises would dwindle given the

increased pricing pressures from pharmacy benefit managers (“PBMs”), powerful middlemen

that buy drugs on behalf of insureds and employers, Novo Nordisk assured investors otherwise.

4. These statements, and similar statements issued throughout the Class Period, were

materially false and misleading. In truth, Novo Nordisk’s reported earnings and forecasts were

2
Case 3:17-cv-00209-BRM-LHG Document 1 Filed 01/11/17 Page 3 of 24 PageID: 3

materially misleading in that they were inflated through the collusive price fixing of the

Company’s insulin drugs. The inflated financial results reported to investors concealed the true

extent of the pricing pressures the Company was experiencing in the U.S., which Novo Nordisk

was only able to conceal by engaging in collusive activity.

5. Investors began to learn the truth regarding Novo Nordisk’s business through a

series of corrective disclosures. On August 5, 2016, the Company announced disappointing

earnings for the second quarter of 2016 because, despite its scheme, Novo Nordisk was finally

unable to conceal the significant pricing pressures it was experiencing across its portfolio.

Significantly, these pricing pressures forced the Company to lower its sales and operating growth

targets for 2016. While CEO Lars Rebien Sørensen assured investors that the Company would

still be able to increase prices in certain instances and reaffirmed Novo Nordisk’s ability to grow

its operating profit at a 10% rate, this news caused the price of the Company’s ADRs to decline

from $55.20 per ADR on August 4 to $49.87 per ADR on August 5, or approximately 10%.

6. On August 8, 2016, Novo Nordisk held a Management Roundtable discussion in

London to provide more details into the Company’s business and pricing strategy. According to

an analyst report issued by Kepler Cheuvreux on August 9 that summarized the Management

Roundtable, the reality is that major net pricing upgrades in the U.S. will be the exception as

opposed to the norm, and that there will be no quick rebound from the Company’s stagnating

growth. This news caused the price of Novo Nordisk ADRs to decline from $49.87 per ADR on

August 5 to $47.13 per ADR on August 8, or nearly 6%.

7. Then, on October 28, 2016, Novo Nordisk cut its long-term profit growth

forecasts by 50%, specifically citing the increased pricing pressures on diabetes drugs in the U.S.

In addition, the Company further cut its 2016 sales growth and operating profit growth targets.

3
Case 3:17-cv-00209-BRM-LHG Document 1 Filed 01/11/17 Page 4 of 24 PageID: 4

Separate from the disappointing earnings, the Company also announced that it received a Civil

Investigative Demand from the U.S. Attorney’s Office for the Southern District of New York

seeking information relating to Novo Nordisk’s contracts and business relationships with PBMs

concerning its insulin products named NovoLog, Novolin and Levemir. On this news, the price

of Novo Nordisk ADRs declined from $40.94 per ADR on October 27 to $35.66 per ADR on

October 28, a decline of roughly 13%. This is the largest decline in the price of Novo Nordisk

ADRs in more than 14 years.

8. Subsequent to the close of the Class Period, on November 3, 2016, Senator Bernie

Sanders and Representative Elijah Cummings sent a letter to the U.S. Department of Justice

calling on federal antitrust regulators to probe illegal collusion by Novo Nordisk and the three

other major insulin producers—Sanofi, Eli Lilly, and Merck—to set the prices for insulin and

other diabetes drugs. In a tacit acknowledgement of its improper conduct, Novo Nordisk

pledged on November 30, 2016 to limit all future drug list price increases to single-digit

percentages.

JURISDICTION AND VENUE

9. The claims asserted herein arise under Sections 10(b) and 20(a) of the Exchange

Act, 15 U.S.C. §§ 78j(b) and 78t(a), and Rule 10b-5 promulgated thereunder by the SEC, 17

C.F.R. § 240.10b-5. This Court has jurisdiction over the subject matter of this action pursuant to

28 U.S.C. §§ 1331 and 1337, and Section 27 of the Exchange Act, 15 U.S.C. § 78aa.

10. Venue is proper in this District pursuant to Section 27 of the Exchange Act and 28

U.S.C. § 1391(b). Novo Nordisk maintains its U.S. headquarters in Plainsboro, New Jersey,

which is situated in this District, and the acts and conduct that constitute the violations of law

complained of herein, including the preparation and/or dissemination to the public of materially

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false and misleading information, occurred in this District. In connection with the acts alleged in

this complaint, Defendants, directly or indirectly, used the means and instrumentalities of

interstate commerce, including, but not limited to, the mails, interstate telephone

communications, and the facilities of the national securities markets.

PARTIES

11. Plaintiff Lehigh County Employees’ Retirement System (“Plaintiff”), based in

Pennsylvania, is a defined benefit plan governed under the Taft-Harley Act. Plaintiff provides

retirement, disability and death benefits to workers within the County of Lehigh, Pennsylvania.

Currently, Plaintiff manages approximately $425 million in assets on behalf of approximately

3,600 participants. Plaintiff purchased shares of Novo Nordisk ADRs on the New York Stock

Exchange during the Class Period and suffered damages as a result of the violations of the

federal securities laws alleged herein.

12. Defendant Novo Nordisk is a global healthcare company focused on diabetes care

and is one of the largest producers of insulin medications. Based in Denmark, the Company was

formed in 1989 by a merger of two Danish companies, Nordisk Gentofte A/S and Novo Industri

A/S. The Company maintains its U.S. headquarters at 800 Scudders Mill Road, Plainsboro, New

Jersey 08536. Novo Nordisk ADRs trade on the New York Stock Exchange, which is an

efficient market, under ticker symbol “NVO.” As of December 31, 2015, Novo Nordisk had

over 240 million ADRs outstanding, owned by hundreds or thousands of investors.

13. Defendant Lars Rebien Sørensen (“Sørensen”) is, and was at all relevant times,

President and Chief Executive Officer of Novo Nordisk. On September 1, 2016, Novo Nordisk

announced that Sørensen would resign from the Company by the end of 2016.

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14. Defendant Jesper Brandgaard (“Brandgaard”) is, and was at all relevant times,

Executive Vice President and Chief Financial Officer of Novo Nordisk.

15. Defendants Sørensen and Brandgaard are collectively referred to hereinafter as

the “Individual Defendants.” The Individual Defendants, because of their positions with Novo

Nordisk, possessed the power and authority to control the contents of Novo Nordisk’s reports to

the SEC, press releases, and presentations to securities analysts, money and portfolio managers,

and institutional investors. Each of the Individual Defendants was provided with copies of the

Company’s reports and press releases alleged herein to be misleading prior to, or shortly after,

their issuance and had the ability and opportunity to prevent their issuance or cause them to be

corrected. Because of their positions and access to material non-public information available to

them, each of the Individual Defendants knew that the adverse facts and omissions specified

herein had not been disclosed to, and were being concealed from, the public, and that the positive

representations and omissions which were being made were then materially false and/or

misleading.

BACKGROUND

16. Novo Nordisk is a global healthcare company and one of the most prolific

producers of diabetes medications. Diabetes is a metabolic condition in which a person’s

pancreas cannot produce insulin, a hormone that controls blood sugar levels. Patients with

diabetes—about 30 million in the U.S. and another 360 million worldwide—are primarily treated

through daily injections of insulin. Novo Nordisk derives roughly 80% of its revenues from

selling insulin-based medications. While there are millions of patients with the condition, the

world market for insulin is dominated by just a handful of companies. Those companies are

Novo Nordisk, Sanofi, Eli Lilly and Merck.

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17. To capitalize on their oligopoly, Novo Nordisk and the three other major players

in the insulin market colluded to increase the prices of their drugs. Indeed, according to an

analysis prepared by the Washington Post, over the past two decades, Novo Nordisk was able to

raise the price of its insulin drugs 450% above the rate of inflation. From 2010-2015, the

Company raised the price of its signature diabetes drug (Levemir) by 169%. In 2014-2015 alone

the Company increased Levemir’s price by 30%, and increased the price of its NovoLog product

by nearly 21%. As Novo Nordisk recently admitted, these price increases were so significant

that “many patients simply can’t afford the medicine they need.”

18. Critically, these price increases were closely synchronized with price increases by

the Company’s purported competitors. For instance, on May 30, 2015, Sanofi increased the

price of its diabetes medication Lantus by over 16%. The very next day, Novo Nordisk

increased the price of Levemir by the exact same amount. The pattern repeated itself six months

later when Sanofi again raised the price of Lantus—this time by almost 12%. Novo Nordisk

quickly increased Levemir’s price to exactly match the price of Lantus. In fact, in 13 instances

since 2009, the prices of Levemir and Lantus have increased in tandem in the U.S. As

demonstrated by the chart below, the prices of several insulin drugs have exhibited a series of

significant, and suspiciously timed price increases. The magnitude and timing of the drug price

increases indicate that Novo Nordisk and the few other companies that control the market for

insulin colluded to fix the prices of their drugs.

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19. Novo Nordisk’s strategy was a success and its earnings soared as a result of its

ability to increase prices and sell its products. Indeed, between 2010 and 2015, Novo Nordisk

delivered 12% annual sales growth, 20% growth in operating profit, and 22% growth in earnings.

But after years of consistently raising prices for insulin, Novo Nordisk and the other major

drugmakers began to experience significant pressure from PBMs to cut or flatten their prices and

were unable to continue their scheme.

NOVO NORDISK DEFRAUDS INVESTORS

20. The Class Period starts on April 30, 2015, the day that Novo Nordisk held its

earnings conference call for the first quarter of 2015. On that call, CEO Lars Rebien Sørensen

announced that the Company achieved operating profit growth of 17% (to $2.1 billion) and sales

growth of 9% (to $3.8 billion), primarily driven by success in its North America segment.

Further, CEO Sørensen assured investors that the Company was “not anticipating any pricing

impact in 2015,” and with specific regard to the Company’s Victoza drug, that the Company is in

“a very strong position with a gold standard product, one should expect that we will hold our

position firm on [] pricing.”

21. In fact, a Danske Bank analyst specifically asked Novo Nordisk on April 30

whether it could still “come back to double-digit growth in the insulin market” given that the

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Company’s competitors were reporting weak underlying growth of “between 1% and 2%” which

was due in large part to “the pressure on prices in U.S.” However, CEO Sørensen simply

dismissed the analyst’s concerns and told investors that despite the pricing pressures, the

Company will still be able to “achieve 10% or more top-line growth in the diabetes market.”

22. The statements and omissions set forth in ¶¶20-21 were materially false and

misleading. In truth, Novo Nordisk’s reported earnings and growth targets were based on the

collusive price fixing of the Company’s insulin drugs. The Company was also experiencing

significant pricing pressures in the U.S. and was only able to conceal those pressures by

engaging in collusive price fixing.

23. On August 6, 2015, the Company held its earnings conference call for the second

quarter of 2015. During that call, CEO Sørensen reported growth of 16% in operating profit (to

$3.9 billion) as well as growth of 9% in sales (to $7.8 billion) for the first six months of 2015.

The growth was driven by strength in the Company’s North America operations and, in

particular, increased sales of Victoza and Levemir. With regard to the pricing of the Company’s

drugs, CEO Sørensen stated that the Company experienced “flat pricing” due to “the strong

performance of Victoza, where we have pricing power because we are the gold standard in that

market. When we look at insulins going forward, we are looking at full-year expectations from

flat to slight positive pricing.”

24. Further, CFO Brandgaard stated on August 6 that “there is a positive impact on

our gross margin to the magnitude of 50 basis points . . . basically coming from an overall higher

sales . . . [of] higher value products. And that trend is expected to continue into second half and

potentially also 2016.”

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25. The statements and omissions set forth in ¶¶23-24 were materially false and

misleading. In truth, Novo Nordisk was experiencing significant pricing pressure in the U.S. and

was only able to report “flat pricing” for its drugs because the Company entered into collusive

agreements with its purported competitors. What’s more, the Company’s reported revenue,

operating profit, sales growth, and margins were overstated in that they were based on collusive

price fixing.

26. The Company held its earnings conference call for the third quarter of 2015 on

October 29, 2015. On that call, CEO Sørensen touted that the Company achieved 9% sales

growth (to $11.8 billion) and 16% operating profit growth (to $5.7 billion) in the first nine

months of 2015 driven in part by strength in Novo Nordisk’s North America business, with the

“highest contribution coming from Victoza and Levemir.” CEO Sørensen also told investors that

the Company expected to achieve mid-to-high single-digit sales growth in 2016, as well as a 3%

increase in pricing.

27. According to CFO Brandgaard, the Company expected to achieve sales growth

for 2015 of 7% to 9%, along with operating profit growth of roughly 20%. CFO Brandgaard

also reiterated that the Company expected to achieve mid-to-high single-digit sales growth in

2016, and that Novo Nordisk expected operating profit growth to increase by the same amount.

According to Brandgaard, this “reflect[s] expectations for continued robust performance of the

portfolio of modern insulins, Tresiba and Victoza.”

28. The statements and omissions set forth in ¶¶26-27 were materially false and

misleading. In truth, Novo Nordisk’s expected growth in sales and operating profit were not

based on the “robust performance of the portfolio of modern insulins,” but rather, the Company’s

assumption that it would continue to collude with its competitors. Further, Novo Nordisk knew

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that it would not be able to increase prices by 3% but-for such collusive activity. The

Company’s sales growth, operating profit growth, and revenue metrics were also materially false

and misleading in that they were based on Novo Nordisk’s collusive agreements to control the

prices of insulin.

29. Further, on February 3, 2016, the Company held its earnings conference call for

the fourth quarter and full year of 2015, during which CEO Sørensen announced operating profit

growth of 14% (to $7.4 billion) and sales growth of 8% (to $16 billion), again driven by strength

in the Company’s North America operations, “with the largest contributions coming from

Victoza and Levemir.” CEO Sørensen also told investors that the Company would achieve 10%

operating profit growth over the long-term.

30. According to CFO Brandgaard, sales and operating profit growth in 2016 would

be between 5% and 9%, but would reach or exceed 10% over the long-term, “reflecting the

current outlook for organic sales growth and the opportunities for operating margin leverage.”

CFO Brandgaard further stated that “if you look to 2015 and become very concrete, then you

could say in 2015 we basically had no effect from prices on our average gross margin.”

31. The statements and omissions set forth in ¶¶29-30 were materially false and

misleading. In truth, the Company’s revenue and earnings metrics were inflated as a result of its

collusive activity. Further, Novo Nordisk’s operating profit and sales growth for 2016 and over

the long-term would be unachievable but-for its scheme given the significant pricing pressures it

was facing in the U.S.

32. Novo Nordisk held its earnings conference call for the first quarter of 2016 on

April 29, 2016. On that day, CEO Sørensen announced that the Company achieved sales growth

of 9% (to $4 billion) and operating profit growth of 10% (after adjusting for a partial divestment

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of a division) driven by strength in the Company’s operations in the United States and

particularly Victoza and Levemir. CEO Sørensen also reiterated that the Company expected to

achieve sales and operating profit growth of between 5% and 9% in 2016. Further, according to

Sørensen, the Company sees “still quite strong growth of Levemir in the U.S. . . . There is some

volume, but there is also a price effect. We took a price increase last year.”

33. Defendant Brandgaard reiterated that the Company expected to achieve 5%-9% in

sales and operating profit growth in 2016 given “a continued robust performance for our modern

insulins . . . Victoza and Tresiba.”

34. The statements and omissions set forth in ¶¶32-33 were materially false and

misleading. In truth, Novo Nordisk’s reported earnings and forecasts were inflated in that they

were based on the collusive price fixing of the Company’s insulin drugs. The Company was also

experiencing significant pricing pressures in the U.S. and was only able to conceal those

pressures by engaging in collusive activity.

DISCLOSURES OF COMPANY’S MISCONDUCT CAUSE MASSIVE INVESTOR


LOSSES

35. On August 5, 2016, the Company announced disappointing earnings for the

second quarter of 2016 because, despite its scheme, it was finally unable to withstand the

intensifying pricing pressure from PBMs. Indeed, the Company announced that the prices of its

drugs—which have been perpetually increasing—would likely be “moderately lower” in 2017.

In fact, Novo Nordisk reported increasing pricing pressure across a broad swath of the

Company’s insulin portfolio.

36. Novo Nordisk also narrowed its forecasts for sales growth to 5%-7% (from 5%-

9%) and operating profit growth to 5%-8% (from 5%-9%) for the year. Also weighing on Novo

Nordisk’s growth is the fact that it lost a significant contract with Express Scripts, the largest

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PBM in the U.S., which refused to cover a number of the Company’s diabetes medications,

including Victoza, Novolin, and NovoLog. Novo Nordisk also lost a contract with

UnitedHealth, another large U.S. PBM, for the Company’s NovoLog product, apparently

because UnitedHealth would no longer pay exorbitant prices for the Company’s drugs.

37. According to an analyst report issued by Deutsche Bank on August 5, the fact that

Novo Nordisk finally acknowledged the “elephant in the room” with regard to the intensifying

pricing pressure “unnerved” investors and “created a stampede.” Similarly, an analyst report

issued by SEB Equities on August 8, stated that “it is [] evident that Novo had to offer large

discounts across its franchise in order to maintain market access” and it is an “ongoing challenge

for Novo Nordisk to convince the largest PBM in the US market, Express Scripts, to include its

products on their national drug lists.”

38. Nevertheless, CEO Sørensen attempted to assure investors by telling them that

“we will see. . . more support for growth” coming from many of the Company’s products. “We

see very strong script growth, we see relatively more stable pricing, even in some instances

opportunities to raise net price slightly. . . I still think it is reasonable for us to have as an

ambition, to grow our diabetes portfolio with 10%.” Despite the Company’s assurances, the

Company’s disappointing earnings and slowing growth caused the price of the Company’s ADRs

to decline from $55.20 per ADR on August 4 to $49.87 per ADR on August 5, or approximately

10%.

39. On August 8, 2016, the Company held a Management Roundtable discussion in

London to attempt to provide more clarity into the Company’s business and pricing strategy.

According to an analyst report issued by Kepler Cheuvreux on August 9 that summarized the

Management Roundtable, the reality is that major net pricing upgrades in the U.S. will be the

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exception as opposed to the norm, and that there will be no quick rebound from the Company’s

stagnating growth. On this news, the price of Novo Nordisk ADRs dropped from $49.87 per

ADR on August 5 to $47.13 per ADR on August 8, or nearly 6%.

40. Less than a month later, on September 1, 2016, Novo Nordisk announced that

CEO Sørensen would resign from the Company by the end of 2016. The announcement was

particularly surprising given that the Board decided just a few months earlier that Sørensen

should remain in the CEO role until his contract expires in 2019. The Company also announced

a number of other executive changes on September 1, including the resignation of Kesper

Hoeiland, the head of the Company’s North America Operations. According to an analyst report

issued by Morgan Stanley on September 1, given the Company’s “very stable and conservative

organization,” the executive changes reflect Novo Nordisk’s “unprecedented challenges such as

US payer pressure and increased competition.”

41. Then, on October 28, 2016, Novo Nordisk announced its second consecutive

quarter of disappointing earnings and cut its long-term profit-growth forecasts by 50%,

specifically citing the increased pricing pressures on diabetes drugs in the U.S. The Company

reported that it expects its long-term profit to grow at a rate of 5% annually, down from the 10%

that Novo Nordisk told investors to expect in February 2016. In addition, the Company also cut

for the second time in as many quarters its 2016 sales growth (from 5%-7% to 5%-6%) and

operating profit growth targets (from 5%-8% to 5%-7%). The Company also stated that it

expects flat to low single-digit percentage growth in operating profit in 2017, and low single-

digit percentage growth in sales for 2017. Given the pricing pressures, Novo Nordisk was forced

to significantly cut costs and reduce the amount that it is able to invest in researching and

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developing new drugs. According to an analyst report issued by Leerink, “NVO mgmt. finally

owned up to the significant challenges it faces in the years ahead.”

42. Separate from the disappointing earnings, the Company also announced on

October 28 that it received a Civil Investigative Demand from the U.S. Attorney’s Office for the

Southern District of New York seeking information relating to Novo Nordisk’s contracts and

business relationships with PBMs concerning its insulin products named NovoLog, Novolin and

Levemir. On this news, the price of Novo Nordisk ADRs declined from $40.94 per ADR on

October 27 to $35.66 per ADR on October 28, a decline of roughly 13%. This was the largest

decline in the price of Novo Nordisk ADRs in more than 14 years.

43. Subsequent to the close of the Class Period, on November 3, 2016, Senator Bernie

Sanders and Representative Elijah Cummings sent a letter to the U.S. Department of Justice

calling on federal antitrust regulators to probe whether Novo Nordisk and the three other major

insulin producers—Sanofi, Eli Lilly, and Merck—colluded to set the prices for insulin and other

diabetes drugs. That letter specifically cited to the skyrocketing prices of insulin over the past 15

years, acknowledged that many of the price increases occurred at the same time, and questioned

the true reasons for the price increases. In a clean break from its anticompetitive scheme, Novo

Nordisk committed on November 30, 2016 to limit all future drug list price increases to single

digit percentages.

LOSS CAUSATION

44. During the Class Period, as detailed herein, Defendants made materially false and

misleading statements and omissions, and engaged in a scheme to deceive the market. This

artificially inflated the price of Novo Nordisk ADRs and operated as a fraud or deceit on the

Class. Later, when Defendants’ prior misrepresentations and fraudulent conduct were disclosed

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to the market on August 5, 2016, August 8, 2016, and October 28, 2016, the price of Novo

Nordisk ADRs fell precipitously, as the prior artificial inflation came out of the price over time.

As a result of their purchases of Novo Nordisk ADRs during the Class Period, Plaintiff and other

members of the Class suffered economic loss, i.e., damages, under the federal securities laws.

CLASS ACTION ALLEGATIONS

45. Plaintiff brings this action as a class action pursuant to Rule 23 of the Federal

Rules of Civil Procedure on behalf of all persons who purchased or otherwise acquired the ADRs

of Novo Nordisk during the Class Period (the “Class”). Excluded from the Class are Defendants

and their families, directors, and officers of Novo Nordisk and their families and affiliates.

46. The members of the Class are so numerous that joinder of all members is

impracticable. The disposition of their claims in a class action will provide substantial benefits

to the parties and the Court. As of December 31, 2015, Novo Nordisk had over 240 million

ADRs outstanding, owned by hundreds or thousands of investors.

47. There is a well-defined community of interest in the questions of law and fact

involved in this case. Questions of law and fact common to the members of the Class which

predominate over questions which may affect individual Class members include:

(a) Whether Defendants violated the Exchange Act;

(b) Whether Defendants omitted and/or misrepresented material facts;

(c) Whether Defendants’ statements omitted material facts necessary in order

to make the statements made, in light of the circumstances under which they were made, not

misleading;

(d) Whether Defendants knew or recklessly disregarded that their statements

and/or omissions were false and misleading;

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(e) Whether the price of Novo Nordisk ADRs was artificially inflated;

(f) Whether Defendants’ conduct caused the members of the Class to sustain

damages; and

(g) The extent of damage sustained by Class members and the appropriate

measure of damages.

48. Plaintiff’s claims are typical of those of the Class because Plaintiff and the Class

sustained damages from Defendants’ wrongful conduct.

49. Plaintiff will adequately protect the interests of the Class and has retained counsel

experienced in class action securities litigation. Plaintiff has no interests which conflict with

those of the Class.

50. A class action is superior to other available methods for the fair and efficient

adjudication of this controversy.

INAPPLICABILITY OF STATUTORY SAFE HARBOR

51. Novo Nordisk’s “Safe Harbor” warnings accompanying its forward-looking

statements issued during the Class Period were ineffective to shield those statements from

liability.

52. Defendants are also liable for any false or misleading forward-looking statements

pleaded herein because, at the time each such statement was made, the speaker knew the

statement was false or misleading and the statement was authorized and/or approved by an

executive officer of Novo Nordisk who knew that the statement was false. None of the historic

or present tense statements made by Defendants were assumptions underlying or relating to any

plan, projection, or statement of future economic performance, as they were not stated to be such

assumptions underlying or relating to any projection or statement of future economic

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performance when made, nor were any of the projections or forecasts made by Defendants

expressly related to, or stated to be dependent on, those historic or present tense statements when

made.

PRESUMPTION OF RELIANCE

53. At all relevant times, the market for Novo Nordisk’s ADRs was an efficient

market for the following reasons, among others:

(a) Novo Nordisk ADRs met the requirements for listing, and were listed and

actively traded on the New York Stock Exchange, a highly efficient and automated market;

(b) As a regulated issuer, Novo Nordisk filed periodic public reports with the

SEC and the New York Stock Exchange;

(c) Novo Nordisk regularly and publicly communicated with investors via

established market communication mechanisms, including through regular disseminations of

press releases on the national circuits of major newswire services and through other wide-

ranging public disclosures, such as communications with the financial press and other similar

reporting services; and

(d) Novo Nordisk was followed by several securities analysts employed by

major brokerage firm(s) who wrote reports which were distributed to the sales force and certain

customers of their respective brokerage firm(s). Each of these reports was publicly available and

entered the public marketplace.

54. As a result of the foregoing, the market for Novo Nordisk ADRs promptly

digested current information regarding Novo Nordisk from all publicly available sources and

reflected such information in the price of Novo Nordisk ADRs. Under these circumstances, all

purchasers of Novo Nordisk ADRs during the Class Period suffered similar injury through their

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purchase of Novo Nordisk ADRs at artificially inflated prices and the presumption of reliance

applies.

55. A Class-wide presumption of reliance is also appropriate in this action under the

Supreme Court’s holding in Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128

(1972), because the Class’ claims are grounded on Defendants’ material omissions. Because this

action involves Defendants’ failure to disclose material adverse information regarding Novo

Nordisk’s sales of insulin—information that Defendants were obligated to disclose—positive

proof of reliance is not a prerequisite to recovery. All that is necessary is that the facts withheld

be material in the sense that a reasonable investor might have considered them important in

making investment decisions. Given the importance of Novo Nordisk’s insulin business, as set

forth above, that requirement is satisfied here.

COUNT I
For Violation of Section 10(b) of the Exchange Act and Rule 10b-5 Against All Defendants

56. Plaintiff repeats and realleges each and every allegation contained above as if

fully set forth herein.

57. During the Class Period, Defendants carried out a plan, scheme, and course of

conduct which was intended to and, throughout the Class Period, did: (i) deceive the investing

public, including Plaintiff and other Class members, as alleged herein; and (ii) cause Plaintiff and

other members of the Class to purchase Novo Nordisk ADRs at artificially inflated prices.

58. Defendants (i) employed devices, schemes, and artifices to defraud; (ii) made

untrue statements of material fact and/or omitted to state material facts necessary to make the

statements not misleading; and (iii) engaged in acts, practices, and a course of business which

operated as a fraud and deceit upon the purchasers of the Company’s ADRs in an effort to

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maintain artificially high market prices for Novo Nordisk ADRs in violation of Section 10(b) of

the Exchange Act and Rule 10b-5 promulgated thereunder.

59. Defendants, individually and in concert, directly and indirectly, by the use, means

or instrumentalities of interstate commerce and/or of the mails, engaged and participated in a

continuous course of conduct to conceal adverse material information about the Company’s

financial well-being, operations, and prospects.

60. During the Class Period, Defendants made the false statements specified above,

which they knew or recklessly disregarded to be false or misleading in that they contained

misrepresentations and failed to disclose material facts necessary in order to make the statements

made, in light of the circumstances under which they were made, not misleading.

61. Defendants had actual knowledge of the misrepresentations and omissions of

material fact set forth herein, or recklessly disregarded the true facts that were available to them.

Defendants engaged in this misconduct to conceal Novo Nordisk’s true condition from the

investing public and to support the artificially inflated prices of the Company’s ADRs.

62. Plaintiff and the Class have suffered damages in that, in reliance on the integrity

of the market, they paid artificially inflated prices for Novo Nordisk ADRs. Plaintiff and the

Class would not have purchased the Company’s ADRs at the prices they paid, or at all, had they

been aware that the market prices for Novo Nordisk ADRs had been artificially inflated by

Defendants’ fraudulent course of conduct.

63. As a direct and proximate result of Defendants’ wrongful conduct, Plaintiff and

the other members of the Class suffered damages in connection with their respective purchases

of the Company’s ADRs during the Class Period.

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64. By virtue of the foregoing, Defendants violated Section 10(b) of the Exchange

Act and Rule 10b-5 promulgated thereunder.

COUNT II
For Violation of Section 20(a) of the Exchange Act Against the Individual Defendants

65. Plaintiff repeats, incorporates, and realleges each and every allegation set forth

above as if fully set forth herein.

66. The Individual Defendants acted as controlling persons of Novo Nordisk within

the meaning of Section 20(a) of the Exchange Act. By virtue of their high-level positions,

participation in and/or awareness of the Company’s operations, direct involvement in the day-to-

day operations of the Company, and/or intimate knowledge of the Company’s actual

performance, and their power to control public statements about Novo Nordisk, the Individual

Defendants had the power and ability to control the actions of Novo Nordisk and its employees.

By reason of such conduct, the Individual Defendants are liable pursuant to Section 20(a) of the

Exchange Act.

WHEREFORE, Plaintiff prays for judgment as follows:

A. Determining that this action is a proper class action under Rule 23 of the Federal

Rules of Civil Procedure;

B. Awarding compensatory damages in favor of Plaintiff and other Class members

against all Defendants, jointly and severally, for all damages sustained as a result

of Defendants’ wrongdoing, in an amount to be proven at trial, including interest

thereon;

C. Awarding Plaintiff and the Class their reasonable costs and expenses incurred in

this action, including attorneys’ fees and expert fees; and

21
Case 3:17-cv-00209-BRM-LHG Document 1 Filed 01/11/17 Page 22 of 24 PageID: 22

D. Awarding such equitable/injunctive or other further relief as the Court may deem

just and proper.

JURY DEMAND

Plaintiff demands a trial by jury.

DATED: January 11, 2017

/s/ James E. Cecchi


CARELLA, BYRNE, CECCHI, OLSTEIN,
BRODY & AGNELLO, P.C.
James E. Cecchi
5 Becker Farm Road
Roseland, New Jersey 07068
Telephone: (973) 994-1700
Facsimile: (973) 994-1744
jcecchi@carellabyrne.com

Liaison Counsel for Plaintiff Lehigh County


Employees’ Retirement System

BERNSTEIN LITOWITZ BERGER


& GROSSMANN LLP
Gerald H. Silk (pro hac vice forthcoming)
Hannah Ross (pro hac vice forthcoming)
Avi Josefson (pro hac vice forthcoming)
1251 Avenue of the Americas
New York, New York 10020
Telephone: (212) 554 1400
Facsimile: (212) 554 1444
jerry@blbglaw.com
hannah@blbglaw.com
avi@blbglaw.com

Counsel for Plaintiff Lehigh County


Employees’ Retirement System

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JS 44 (Rev. 0 /16) CIVIL COVER SHEET
The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as
provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the
purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.)

I. (a) PLAINTIFFS DEFENDANTS


Lehigh County Employees' Retirement System Novo Nordisk A/S, Lars Rebien Sørensen and Jesper Brandgaard

(b) County of Residence of First Listed Plaintiff Lehigh County, PA County of Residence of First Listed Defendant
(EXCEPT IN U.S. PLAINTIFF CASES) (IN U.S. PLAINTIFF CASES ONLY)
NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF
THE TRACT OF LAND INVOLVED.

(c) Attorneys (Firm Name, Address, and Telephone Number) Attorneys (If Known)
James E. Cecchi, Carella, Byrne, Cecchi, Olstein, Brody & Agnello, P.C.,
5 Becker Farm Road, Roseland, NJ 07068;
Email: jcecchi@carellabyrne.com; Tel: 973-994-1700

II. BASIS OF JURISDICTION (Place an “X” in One Box Only) III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff
(For Diversity Cases Only) and One Box for Defendant)
1 U.S. Government 3 Federal Question PTF DEF PTF DEF
Plaintiff (U.S. Government Not a Party) Citizen of This State 1 1 Incorporated or Principal Place 4 4
of Business In This State

2 U.S. Government 4 Diversity Citizen of Another State 2 2 Incorporated and Principal Place 5 5
Defendant (Indicate Citizenship of Parties in Item III) of Business In Another State

Citizen or Subject of a 3 3 Foreign Nation 6 6


Foreign Country
IV. NATURE OF SUIT (Place an “X” in One Box Only)
CONTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES
110 Insurance PERSONAL INJURY PERSONAL INJURY 625 Drug Related Seizure 422 Appeal 28 USC 158 375 False Claims Act
120 Marine 310 Airplane 365 Personal Injury - of Property 21 USC 881 423 Withdrawal 376 Qui Tam (31 USC
130 Miller Act 315 Airplane Product Product Liability 690 Other 28 USC 157 3729(a))
140 Negotiable Instrument Liability 367 Health Care/ 400 State Reapportionment
150 Recovery of Overpayment 320 Assault, Libel & Pharmaceutical PROPERTY RIGHTS 410 Antitrust
& Enforcement of Judgment Slander Personal Injury 820 Copyrights 430 Banks and Banking
151 Medicare Act 330 Federal Employers’ Product Liability 830 Patent 450 Commerce
152 Recovery of Defaulted Liability 368 Asbestos Personal 840 Trademark 460 Deportation
Student Loans 340 Marine Injury Product 470 Racketeer Influenced and
(Excludes Veterans) 345 Marine Product Liability LABOR SOCIAL SECURITY Corrupt Organizations
153 Recovery of Overpayment Liability PERSONAL PROPERTY 710 Fair Labor Standards 861 HIA (1395ff) 480 Consumer Credit
of Veteran’s Benefits 350 Motor Vehicle 370 Other Fraud Act 862 Black Lung (923) 490 Cable/Sat TV
160 Stockholders’ Suits 355 Motor Vehicle 371 Truth in Lending 720 Labor/Management 863 DIWC/DIWW (405(g)) 850 Securities/Commodities/
190 Other Contract Product Liability 380 Other Personal Relations 864 SSID Title XVI Exchange
195 Contract Product Liability 360 Other Personal Property Damage 740 Railway Labor Act 865 RSI (405(g)) 890 Other Statutory Actions
196 Franchise Injury 385 Property Damage 751 Family and Medical 891 Agricultural Acts
362 Personal Injury - Product Liability Leave Act 893 Environmental Matters
Medical Malpractice 790 Other Labor Litigation 895 Freedom of Information
REAL PROPERTY CIVIL RIGHTS PRISONER PETITIONS 791 Employee Retirement FEDERAL TAX SUITS Act
210 Land Condemnation 440 Other Civil Rights Habeas Corpus: Income Security Act 870 Taxes (U.S. Plaintiff 896 Arbitration
220 Foreclosure 441 Voting 463 Alien Detainee or Defendant) 899 Administrative Procedure
230 Rent Lease & Ejectment 442 Employment 510 Motions to Vacate 871 IRS—Third Party Act/Review or Appeal of
240 Torts to Land 443 Housing/ Sentence 26 USC 7609 Agency Decision
245 Tort Product Liability Accommodations 530 General 950 Constitutionality of
290 All Other Real Property 445 Amer. w/Disabilities - 535 Death Penalty IMMIGRATION State Statutes
Employment Other: 462 Naturalization Application
446 Amer. w/Disabilities - 540 Mandamus & Other 465 Other Immigration
Other 550 Civil Rights Actions
448 Education 555 Prison Condition
560 Civil Detainee -
Conditions of
Confinement
V. ORIGIN (Place an “X” in One Box Only)
1 Original 2 Removed from 3 Remanded from 4 Reinstated or 5 Transferred from 6 Multidistrict 8 Multidistrict
Proceeding State Court Appellate Court Reopened Another District Litigation - Litigation -
(specify) Transfer Direct File
Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity):
15 U.S.C. §§ 78j(b) and 78t(a)
VI. CAUSE OF ACTION Brief description of cause:
Violations of the federal securities laws
VII. REQUESTED IN CHECK IF THIS IS A CLASS ACTION DEMAND $ CHECK YES only if demanded in complaint:
COMPLAINT: UNDER RULE 23, F.R.Cv.P. JURY DEMAND: Yes No
VIII. RELATED CASE(S)
(See instructions):
IF ANY JUDGE DOCKET NUMBER
DATE SIGNATURE OF ATTORNEY OF RECORD
01/11/2017 /s/ James E. Cecchi
FOR OFFICE USE ONLY

RECEIPT # AMOUNT APPLYING IFP JUDGE MAG. JUDGE


Case 3:17-cv-00209-BRM-LHG Document 1-1 Filed 01/11/17 Page 2 of 2 PageID: 26
JS 44 Reverse (Rev. 0 /16)

INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS 44


Authority For Civil Cover Sheet

The JS 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and service of pleading or other papers as
required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is
required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. Consequently, a civil cover sheet is submitted to the Clerk of
Court for each civil complaint filed. The attorney filing a case should complete the form as follows:

I.(a) Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use
only the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and
then the official, giving both name and title.
(b) County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the
time of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land
condemnation cases, the county of residence of the "defendant" is the location of the tract of land involved.)
(c) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting
in this section "(see attachment)".

II. Jurisdiction. The basis of jurisdiction is set forth under Rule 8(a), F.R.Cv.P., which requires that jurisdictions be shown in pleadings. Place an "X"
in one of the boxes. If there is more than one basis of jurisdiction, precedence is given in the order shown below.
United States plaintiff. (1) Jurisdiction based on 28 U.S.C. 1345 and 1348. Suits by agencies and officers of the United States are included here.
United States defendant. (2) When the plaintiff is suing the United States, its officers or agencies, place an "X" in this box.
Federal question. (3) This refers to suits under 28 U.S.C. 1331, where jurisdiction arises under the Constitution of the United States, an amendment
to the Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code takes
precedence, and box 1 or 2 should be marked.
Diversity of citizenship. (4) This refers to suits under 28 U.S.C. 1332, where parties are citizens of different states. When Box 4 is checked, the
citizenship of the different parties must be checked. (See Section III below; NOTE: federal question actions take precedence over diversity
cases.)

III. Residence (citizenship) of Principal Parties. This section of the JS 44 is to be completed if diversity of citizenship was indicated above. Mark this
section for each principal party.

IV. Nature of Suit. Place an "X" in the appropriate box. If the nature of suit cannot be determined, be sure the cause of action, in Section VI below, is
sufficient to enable the deputy clerk or the statistical clerk(s) in the Administrative Office to determine the nature of suit. If the cause fits more than
one nature of suit, select the most definitive.

V. Origin. Place an "X" in one of the seven boxes.


Original Proceedings. (1) Cases which originate in the United States district courts.
Removed from State Court. (2) Proceedings initiated in state courts may be removed to the district courts under Title 28 U.S.C., Section 1441.
When the petition for removal is granted, check this box.
Remanded from Appellate Court. (3) Check this box for cases remanded to the district court for further action. Use the date of remand as the filing
date.
Reinstated or Reopened. (4) Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date.
Transferred from Another District. (5) For cases transferred under Title 28 U.S.C. Section 1404(a). Do not use this for within district transfers or
multidistrict litigation transfers.
Multidistrict Litigation – Transfer. (6) Check this box when a multidistrict case is transferred into the district under authority of Title 28 U.S.C.
Section 1407.
Multidistrict Litigation – Direct File. (8) Check this box when a multidistrict case is filed in the same district as the Master MDL docket.
PLEASE NOTE THAT THERE IS NOT AN ORIGIN CODE 7. Origin Code 7 was used for historical records and is no longer relevant due to
changes in statue.

VI. Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional
statutes unless diversity. Example: U.S. Civil Statute: 47 USC 553 Brief Description: Unauthorized reception of cable service

VII. Requested in Complaint. Class Action. Place an "X" in this box if you are filing a class action under Rule 23, F.R.Cv.P.
Demand. In this space enter the actual dollar amount being demanded or indicate other demand, such as a preliminary injunction.
Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded.

VIII. Related Cases. This section of the JS 44 is used to reference related pending cases, if any. If there are related pending cases, insert the docket
numbers and the corresponding judge names for such cases.

Date and Attorney Signature. Date and sign the civil cover sheet.