KC v Shiley Inc

[1997] FCA 796

FEDERAL COURT OF AUSTRALIA

PRACTICE AND PROCEDURE - application for further and better discovery - where order for discovery made exempting specific category of documents previously discovered in United States litigation - whether failure by respondents to comply with order for discovery - where failure by respondents to discover a large number of documents - whether further order for discovery necessary - where discoverable employee records subject to Californian privacy laws - where discoverable documents of experts subject to protective orders of United States court

Federal Court Rules, O 15 r 2, r 15

Commonwealth v Northern Land Council (1991) 30 FCR 1, cited
Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55, cited
Trade Practices Commission v CC (NSW) Pty Ltd (No 4) (1995) 58 FCR 426, applied

KC, KS, KF and KL v
SHILEY INCORPORATED AND PFIZER INCORPORATED

No NG 633 of 1993

TAMBERLIN J
SYDNEY
14 AUGUST 1997

IN THE FEDERAL COURT OF AUSTRALIA	)
)
NEW SOUTH WALES DISTRICT REGISTRY	)   NG 633 of 1993
)
GENERAL DIVISION	)

BETWEEN:             

KC
First Applicant

KS by her next friend KC
Second Applicant

KF by her next friend KC
Third Applicant

KL by her next friend KC
Fourth Applicant

  AND:  

SHILEY INCORPORATED
First Respondent

PFIZER INCORPORATED
Second Respondent

JUDGE:	TAMBERLIN J
PLACE:	SYDNEY
DATED:	14 AUGUST 1997

REASONS FOR JUDGMENT  (DISCOVERY)

On this motion the applicants seek orders which require the respondents to comply with the discovery order made by Lockhart J on 13 December 1996, and in addition, seek orders in these terms:

“2.The Respondents give further discovery including but not limited to the following:

(a) Employment records of all persons engaged in the manufacture and fabrication of the heart valve which was implanted into the late ‘KA’ “the KA valve”.

(b) All records relating to the employment of Junior Cervantes.

(c) All documents relating to the research and other investigations carried out by or on behalf of the “Shiley Heart Valve Research Centre”.

(d) All records and/or documents relating to the research carried out by Professor Bass A de Mol, cardiovascular surgeon, including research on 70 degree Bjork Shiley Convexo Concave valves.

(e) All documents produced to or used by Professor Williams in relation to the report dated and annexures.

(f) A complete list of serial numbers of all the 70 degree Bjork Convexo Concave valves.

(g) All documents relating to and showing the serial numbers of all discs fitted into 70 degree Bjork Shiley Convexo Concave valves.

(h) All sets of Device History Records originating for the Fabrication Order 82002957 be produced.

(l) All correspondence, memoranda, telexes or any other written communication between Professor Viking Bjork and Shiley/Pfizer.”

During the hearing of this motion the applicants submitted draft orders (“MFI 14”) seeking:

“1.Within seven days Respondents to provide the Applicants with a copy of all lists, indexes and computerised records of all documents in their possession.

2.Within seven days Respondents to provide the Applicants with a list of all documents which the Respondents contend cannot be ordered to be produced on discovery by the Federal Court of Australia.

3.Within seven days Respondents to provide the Applicants with a list of all documents provided on discovery or pursuant to document production requests in all other Bjork-Shiley convexo-concave heart valve litigation apart from:

(a)documents recorded on microfilm in the possession of the United States law firm Robins Kaplan Miller & Ciresi, arising out of the Khan litigation;

and

(b)documents already identified on the list of documents filed in the present proceedings on 16 March 1997 and documents identified in the letter from Freehill Hollingdale & Page to Cashman & Partners dated June 1997.

4.Within seven days Respondents to provide a list of all documents which the Respondents contend cannot be ordered to be produced on discovery in the present litigation by the Federal Court of Australia because of the operation of any Californian law relating to privacy.

5.Within seven days Respondents to provide the Applicants with a copy of any microfilm or other imaged documents in their possession, apart from documents which were microfilmed by Robins Kaplan Miller & Ciresi.

6.Within seven days Respondents to provide the Applicants with a copy of all depositions and exhibits thereto of all experts of both Plaintiffs and Defendants in all other litigation arising out of the Bjork-Shiley 60º or 70º CC heart valves, including the Dairyland and Seaman litigation.

7.Respondents to provide the Applicants with a copy of all documents relating to the acquisition of Shiley by Pfizer, including but not limited to those referred to in paragraphs 4, 5 and 6 of the Notice to Produce dated 19 June 1997.

8.Subject to the above, Respondents to provide the Applicants with a copy of all employment records of all persons involved in the fabrication, manufacture and welding of the ‘KA’ valve, including Junior Cervantes, together with all employment records relating to employee number 2832 together with a copy of the results of any report, investigation or research concerning employee 2832.

9.Respondents to provide the Applicants with convenient access, in Australia, to all research, and underlying data, carried out by or on behalf of the Shiley Heart Valve Research Centre including, but not limited to all research relating to the fracture or other problems experienced with 70º convexo-concave heart valves including the results of research carried out by others including Professor Bas de Mol.

10.Respondents to provide Applicants with a copy, within seven days, of all PCRs from July 1, 1996.

11.Respondents to provide the Applicants with a copy of all device history records for fabrication order 82002957 including the scrap tickets and other documentation concerning any valves or component parts thereof which did not pass any quality control inspection procedures.

12.Respondents to provide the Applicants with a copy of all correspondence, memoranda, telexes or any other written communication or record of oral communication between Professor Viking Bjork and Shiley/Pfizer.

13.All documents produced or used by Professor Williams for the purpose of preparing the report and annexures previously served on the Applicants, together with any other documents or data used by Professor Williams for the purpose of preparing his witness statement.

14.All documents other than those referred to above in the possession of Pfizer Inc. in relation to Shiley Incorporated.”

The matter has been fixed for hearing on 25 August 1997. The hearing is presently estimated to continue for at least several months.

The claim is a large one seeking compensatory damages in an amount of $10 million, together with a claim for substantial punitive and exemplary damages, interest and costs. The claim is based on the alleged failure of an artificial heart valve. It is said that the valve, known as a 70º Bjork Shiley Convexo Concave Valve (“the valve”), was defective and led to the death of the husband of the first applicant. It is also said that the conduct of the respondents and their employees was so blameworthy as to attract an award in the highest range of punitive and exemplary damages.

The number and range of documents which are or may be relevant to this proceeding is formidable. The time span ranges from 1977 to 1997; a period of over twenty years. There has already been considerable litigation in the United States where heart valves were manufactured by Shiley, the first respondent, and extensively implanted. This litigation has to date generated and led to the production of a great number of relevant and potentially relevant documents. The amount of discoverable material runs into many thousands of boxes and millions of pages. Much of it has already been made available to the applicants’ legal advisers directly or through United States’ lawyers who have acted in other proceedings. The documents range over materials held throughout the United States, principally on the East and West Coast, in California and New York, and also overseas. The respondents say that most of the material is not indexed or specifically classified.

Before turning to the submissions it is helpful to briefly look at the history of the matter.

Background

The applicants instituted proceedings on 16 August 1993 against the second respondent (“Pfizer”) in the United States.

On 18 August 1993 the present proceedings against both respondents were instituted in Australia.

Pfizer sought and was granted a stay of the proceedings in the United States. This was granted by Judge Taylor of the United States District Court sitting in California on 15 November 1994. The United States proceedings were not, however, dismissed. His Honour conditioned the stay on Pfizer’s “unqualified agreement to adhere to seven conditions”. These are referred to as the Stangvik conditions and read as follows:

1.Submission to jurisdiction in Australia;

2.Compliance with discovery orders of the Australian courts;

3.Agreement to make past and present employees reasonably available to testify in Australia at defendants’ costs if so ordered within the discretion of the Australian courts;

4.Tolling of the statute of limitations during the pendency of the actions in California;

5.Agreement to make documents in their possession in the United States available for inspection in Australia, as required by Australian law, at defendants’ expense;

6.Agreement that depositions in the United States might proceed under section 2029; and

7.Agreement to pay any final judgments rendered in the Australian actions.

The relevant provisions for present purposes are clauses 1, 2, 3 and 5.

The Australian proceedings were not actively pursued until after January 1995.

On 30 March 1995 the applicants filed Notices for Discovery which set out categories of documents and materials in relation to the 70º heart valve, which is the subject of this proceeding, and the 60º heart valve which was its predecessor. Each Notice contained two schedules, one with 73 categories of documents and the other with 66 categories. These categories were substantially identical to classes of discovery documents formulated and used in the United States litigation relating to heart valve failure, most notably in what is referred to as the Khan litigation, in which Shiley and Pfizer were defendants.

On 3 April 1995 the former solicitors for the respondents, Cutler Hughes and Harris, wrote to the applicants’ solicitors stating:

“......

While we believe that discovery is premature at the present time, the following is provided by way of assistance to you in understanding the present position with documents.

First, we will make available for your inspection at our office more than 2.5 million microfilmed pages of Shiley C/C heart valve documents responsive to your document requests. These materials encompass virtually every conceivable topic concerning the Shiley heart valve.

Second, to assist in your review and understanding of the Shiley heart valve documents, we will make available for your inspection at our office several indexes. The indexes categorise heart valve documents along the lines of the specifications set forth in your document requests, including one index which categorises documents concerning the 70º C/C valve. Although some of the documents on the microfilm have not been categorised, more than 1.1 million pages have been categorised.

Third, as you know, all of the microfilmed documents were produced to your United States co-counsel, the Robins Kaplan law firm several years ago. Robins Kaplan has its own computerised indexes and analyses of the documents which you can use to further assist your review and understanding.

....”

Discovery - Order of Lockhart J

The matter progressed through to 13 December 1996 when Lockhart J, by consent, made the following order as to discovery:

“1.Direct that each party prepare and serve a Verified List of Documents by way of discovery on or before Friday, 31 January 1997, save that the Respondents need not identify on such list any document which has previously been made available for inspection and/or copying to the United States law firm of Robins Kaplin Miller & Cries in any case arising out of the fracture of a 60º or 70º Bjork-Shiley convexo concave heart valve.

2.Direct that each party make available for inspection by the other party, at the Sydney office of the solicitors for the party, such documents as are discovered pursuant to (1) above and that such documents be available for inspection on or before Friday 14 February 1997.”

Shortly prior to his Honour making the above order, the applicants’ solicitor, Dr Cashman, stated:

“I am instructed that some 90 to 95 per cent of the documents in the possession of the respondents have previously been provided and therefore the ambit of discovery is relatively small and for that reason we think it not unreasonable that an order be made for the production of a list of the hitherto undiscovered documents by the end of January.”

In relation to this statement the respondents say that the information given to Lockhart J was in fact incorrect and therefore the discovery order was made on a false premise. It now appears that in fact there are still millions of documents required to be assembled and examined with a view to deciding whether they are relevant and if so whether they are privileged. By fixing a date of 31 January 1997 for the List of Documents, it is said, that his Honour must have contemplated an exercise many orders of magnitude less than that which is now suggested as necessary by the applicants.

No objection was raised by the respondents to the general nature of the terms of the order made by his Honour either at the time it was made or thereafter up to the time when verified discovery was given on 26 March 1997.

The particular exclusion from the discovery order of documents made available to Robins Kaplan calls for some explanation.

According to an affidavit sworn by Mr Muratore of Freehill, Hollingdale & Page (“Freehills”) on 17 July 1997, who is the solicitor acting for the respondents, the law firm of Robins Kaplan in late 1987 made the first comprehensive demand for production of documents in a matter of Khan v Shiley Inc. which was before the Superior Court of the State of California. This demand specified 77 categories of documents for discovery. Shortly thereafter Shiley commenced collecting, storing, preserving and making available its documents relating to heart valves. It appears that Shiley collected files from employees together with its own files and archives which contained heart valve material and stored theses documents in a document facility and reading room in Irvine, California (“the facility”). Shiley preserved, so far as possible, the records in the form maintained in the ordinary course of business by the employees. There is said to be no complete index of individual documents stored in the facility. Searching for and locating particular documents is a difficult time consuming process which, it is said, requires determinations as to which employee may have had copies of documents and where in the different filing systems the document may be found.

In about April 1988 the production of documents to Robin Kaplan began. After a pause in May 1988 the production resumed in about March 1990. At this time all of the documents in the facility were made available to Robins Kaplan for inspection and/or copying. These comprised approximately 5,200 boxes of documents. The inspection by Robins Kaplan continued until September 1990. From March 1990 to September 1990 it is said they reviewed 1,270 boxes of documents, microfilming 1,196 of those boxes. This resulted in about 1.3 million microfilmed pages.

On 14 June 1991 the judge handling the Khan litigation ordered Shiley to designate documents produced by reference to the appropriate Khan category. For the remainder of 1991 to May 1992 Shiley Counsel conducted an extensive review of documents in the facility and categorised those responsive to the 77 Khan categories. Attorneys were sent to the foreign subsidiaries of Shiley and Pfizer where heart valve documents were identified. From that exercise approximately 347 boxes containing copies responsive to the 77 categories were processed for production to Robins Kaplan, making a total of 5,547 boxes of documents.

Between June 1991 and May 1992 Robins Kaplan is said to have inspected a further 1,465 boxes of documents, in addition to the boxes referred to earlier. By May 1992 Robins Kaplan had inspected more than 3,000 boxes of documents and microfilmed in the order of 2.5 million pages.

Robins Kaplan ceased inspection in May 1992. Shiley continued to categorise the remainder of the boxes of documents, transferring these documents to microfilm in June 1995. Approximately 500,000 pages of additional documents were microfilmed by Shiley. It is said that that all of the microfilm is held by Freehills in 18 boxes, each containing up to 114 spools of microfilm. The existence of this large amount of post May 1992 microfilm was not specifically disclosed by the respondents to the applicants until Mr Muratore’s affidavit of 17 July 1997. Indeed, on three separate occasions, including 2 July 1997, Freehills stated to the applicants that the microfilm in their possession only related to the documents inspected by Robins Kaplan and as such was specifically excluded from discovery. This is inconsistent with Mr Muratore’s affidavit of 17 July 1997.

On 26 March 1997 the respondents in response to the December orders of Lockhart J filed a list of documents which identified 816 categories of documents relating to the C/C heart valve. It is said that some of the categories in the list contain tens of thousands of documents. It is also said the documents are located in offices of the respondents’ solicitors and would fill approximately 220 lever arch folders.

It should be pointed out that when swearing his affidavit of discovery in March 1997, the deponent, Mr Phifer, stated that he could not be absolutely sure that all relevant documents to the proceedings are contained in the facility. He says that to the best of his knowledge the documents made available to Robins Kaplan are those in the list which cover the issues which might reasonably arise on the pleadings.

On 12 June 1997, the respondents’ solicitors wrote to the applicants’ solicitors stating that they had available on microfilm the documents provided to Robins Kaplan and a hard copy of all documents listed in the respondents’ List of Documents.

On 26 June 1997 the respondents’ solicitors notified the applicants’ solicitors that they were preparing a supplementary list of 73 documents largely comprising medical articles. At this stage, no supplementary list has been filed by the respondents.

A further matter, which has caused considerable disquiet to the applicants, is the late disclosure in the affidavit of Mr Muratore of 17 July 1997, that a large number of additional documents were not discovered or made available to Robins Kaplan for inspection because they were not included in the facility or because they came into existence after Robins Kaplan terminated its inspection in May 1992. These documents were not included in the respondents’ list of documents. They include the following categories:

“(a)Documents created or received by the Shiley Heart Valve Research Centre and other Shiley employees from 1989 to the present day. There are approximately 1,000 boxes of material which were created or received by the Shiley Heart Valve Research Centre and other Shiley employees which have not been added to the Facility. I am informed that it will take until at least early 1998, with five lawyers (together with paralegal support) working on the matter full-time to review these documents for relevance, privilege or any other matter which may restrict production. Shiley has already commenced this task.

(b)Any documents which may have been generated or received by the Respondents’ foreign locations after completion of the 1992 document collection effort described in paragraph 12 above.

(c)Certain documents in the possession of Pfizer Inc. in relation to Shiley Inc. There are a large number of documents in the possession of Pfizer Inc. in New York that relate to Shiley. These documents will have to be reviewed for relevance, privilege, confidentiality or any other matter which may restrict their production before they could be produced. I am informed that it is estimated that it will take five attorneys working full-time with paralegal help at least two months to complete such a review”.

The applicants submit that the respondents should be ordered to comply with a general order for discovery on the basis of the Stangvik conditions; the December 1996 order of Lockhart J; and their previous offers to make documents available in accordance with the Khan categories. The applicants say that, on their own admission, the respondents have completed review, inspection by lawyers and categorisation of documents for “generic” discovery purposes, that is in respect of documents not related specifically to particular plaintiffs. This was done as early as 1992. The respondents have not provided any adequate explanation or direct evidence as to the reasons for their continued refusal to comply with orders in the United States Court. The applicants say that the list of discovery documents contains a number of non-existent or irrelevant, unintelligible or outdated documents, some of which are outside Australia, and that the respondents have declined to produce any lists or indexes where, it is said, to be inconceivable such lists and indexes are not in their possession.

As to alleged “non-existent” documents I am satisfied with the detailed explanation given on instructions by Mr Muratore.

Principles

The purpose of discovery is to require compulsory disclosure of documents and information relevant to the proceedings. It enables parties to obtain evidence or admissions from the other party. It is directed to avoiding surprise and encouraging settlement.

Documents are discoverable if they relate to any matter in question between the parties: Federal Court Rules, O 15 r 2(2).

The Full Federal Court said in Commonwealth v Northern Land Council (1991) 30 FCR 1 at 23 that:

“A document relates to a matter in question between the parties if it is ‘reasonable to suppose’ that the document ‘contains information which may - not which must - either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary’.”

If a document may fairly be considered to lead to a chain of inquiry which might assist the party’s case or damage the opponent’s case, then it is within the above principle: Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 at 60, 62-63. This “extended” discovery is a vital part of the law of discovery and enables justice to be done where one party knows the facts and possesses the documents and the other does not.

Order 15 r 15 of the Federal Court Rules provides that the Court shall not make an order for the filing of any list of documents unless satisfied that the order is necessary at the time when the order is made.

The respondents emphasise this provision in support of their submission that general or further extensive discovery should not be made in this proceeding because the Court should not be satisfied that the order is necessary at this time having regard to the history of the matter. They point out that the onus rests with the applicants to establish that discovery is necessary. The necessary test is concerned with what is required in order to provide a fair trial and for the fair determination of the case: Trade Practices Commission v CC (NSW) Pty Ltd (No 4) (1995) 58 FCR 426 at 436-437.

The Federal Court Rules also provide in detail for the making of a list of documents and the contents of such a list. These requirements include the enumeration of documents which are or have been in the possession, custody or power of the party making the list. The deponent to a discovery affidavit has a duty to make full and proper inquiries to enable disclosure of relevant materials.

Discovery is of particular importance in a case such as the present where there is a great disparity in the resources and ability of the parties. The respondents are far more aware of relevant documents and information relating to the heart valves and the history of their manufacture.

Employee records - privacy

These categories are:

“(a) Employment records of all persons engaged in the manufacture and fabrication of the heart valve which was implanted into the late KA ‘the KA valve’.

(b) All records relating to the employment of Junior Cervantes.”

The respondents say that they are prepared to produce these documents but that Californian privacy law requires notification to, and authorisation by, particular employees, before such documents can be disclosed or made available.

The respondents do not challenge this Court’s power to make an order requiring production of these files.

Some extracts from the law and decisions of Californian courts have been furnished to me to support the proposition that a delicate balance must be struck between the right to privacy and the public need for discovery in order to ascertain the truth in the dispute. However, the material placed before me is inadequate to make any determination on this question as to the records of any particular employees.

The employment records appear to go back many years because the 70º valve ceased to be manufactured in 1983 and manufacture of the 60º valve ceased in 1986. There may not be, in these circumstances, a great privacy problem but it is impossible to tell on the state of the evidence.

The records of the employees may prove to be relevant and important and I therefore consider that they should be discovered and made available to the applicants as soon as practicable. This is subject, however, to the satisfaction of any requirements of United States privacy laws being met and suitable terms being agreed to, if required, as to confidentiality and non-disclosure.  It is not appropriate for this Court, in my view, to compel unconditional disclosure of documents and records particularly with respect to the nationals of another country in circumstances where such an order may result in a breach of a legal or constitutional right to privacy.

Shiley Heart Valve Research Centre documents

The documents sought under this head are:

“(c) All documents relating to the research and other investigations carried out by or on behalf of the “Shiley Heart Valve Research Centre”.

The non-disclosure of these documents was first disclosed in the 17 July 1997 affidavit of Mr Muratore. There is some material which indicates that reference has been made to recent research at the Centre and some documents from the Centre are said to have been produced in litigation in the United States.

These documents and the material at the Centre appear to be of such a nature as to be potentially discoverable. The documents require processing for the purpose of determining whether they are relevant and should be produced and also as to any questions of privilege or confidentiality which may apply.

Mr Goott, the respondents’ United States lawyer, practising in New York, has given evidence that it would take until at least early 1998 before the processing of documents preparatory to discovery could take place.

No satisfactory explanation has been given to justify the earlier non-disclosure of the existence of documents at this location.

All relevant documents of the Shiley Heart Valve Research Centre concerning research into and findings relating to investigation into the causes of strut fractures and the extent of defective valves should be made available on an ongoing basis subject to any claims for privilege, privacy, or protective order. Given that the discovery process in respect of the documents should have been undertaken and completed many months ago, the respondents should make available the maximum practicable resources to promptly process these documents.

I consider that the same procedures and approach should be taken in respect of documents in foreign locations and in New York to the extent that these documents have not previously been discovered or made available

Documents relating to Research by Dr de Mol

The documents sought are:

“(d) All records and/or documents relating to the research carried out by Professor Bass A de Mol, cardiovascular surgeon, including research on 70 degree Bjork Shiley Convexo Concave valves.”

Insofar as these documents should be reviewed for privilege and subject thereto any relevant documents should be made available on an ongoing basis.

Documents used by Professor Williams

I note that the applicants do not press at this stage for an order in relation to documents or data used by Professor Williams in preparing his report.

Serial Numbers and Device History Records

The motion seeks production of:

“(f) A complete list of serial numbers of all the 70 degree Bjork Convexo Concave valves.

(g) All documents relating to and showing the serial numbers of all discs fitted into 70 degree Bjork Shiley Convexo Concave valves.

(h) All sets of Device History Records originating for the Fabrication Order 82002957...”

In relation to the serial numbers it is said that no list exists but that a copy of log books will be provided.

The process of making these documents available should be undertaken immediately so they can be produced to the applicant.

As to the device history records it is said that some of these records are included in the documents to which Robins Kaplan has had access. Notwithstanding this, all additional relevant records, including those after May 1992, should be made available for inspection, again on an on-going basis.

Correspondence with Professor Bjork

Documents called for are:

“(l) All correspondence, memoranda, telexes or any other written communication between Professor Viking Bjork and Shiley/Pfizer.”

It is said that most if not all of this material is in the facility in California and much of it has been produced on microfilm.

The remainder of the material that comes within the Khan classifications should, in my view, be identified and made available on an on-going basis and this process should be commenced as soon as possible.

Protective Orders

The applicants seek a copy of all documents and exhibits of all experts provided by the parties in United States litigation known as the Dairyland Insurance litigation and the Seaman litigation.

The respondents resist this claim on the ground that the documents are the subject of specific protective orders which constrain the production or disclosure of documentary material.

The Protective and Confidentiality Order regarding items of discovery made in August 1994 in the Dairyland Insurance litigation contains the following material clauses:

“2.      All Discovery Materials produced or provided in this litigation by parties or non-parties are to be used by the parties other than the producing party ... only for the purpose of this action unless otherwise ordered by the Court or agreed to by the affected parties. Discovery Material shall not be disclosed to any person or entity except in accordance with the terms, conditions and restrictions of this Protective Order. Any party may apply to the Court for relief from the terms of this Protective Order with respect to any particular document(s) or information....

11.      This protective order shall not govern the use by a party of any copies of any documents obtained other than in this action notwithstanding the fact that the party either produces that document in the course of discovery in this action or received a copy of that documents through discovery in this action.

12.      Nothing in this protective order restricts the use a party may make of any documents produced by it or generated by it in this litigation provided such generated documents do not contain Discovery Materials produced by another party.

13.      This Protective Order shall continue to be binding after the conclusion of this litigation except that a party make seek the written permission of the producing party or further order of the Court with respect to .... modification of this Protective Order. The Court shall retain jurisdiction to enforce or modify this order.”

In the Seaman litigation the relevant clauses of the Stipulation and Protective Order, made 29 October 1993, provide:

“9.      Nothing in this Stipulation and Protective Order shall prevent any person or entity bound by this Stipulation and Protective Order from disclosing its own documents. Such disclosure shall not be deemed a waiver of any rights granted by this Stipulation and Protective Order or of a designation of any Material as Confidential or Highly Confidential Material.

.....

13.       This Stipulation and Protective Order may be modified at any time by Stipulation or by Order of the Court.”

The terms of the Orders permit the parties to disclose their own documents. Accordingly, insofar as documents are produced or generated by Pfizer or Shiley, they are apparently available without the requirements of a court order or authorisation.

To the extent that documents relevant to the present proceedings may be made available consistently with the terms of the protective orders or with any variation granted by the appropriate court or consent given by the appropriate party, such documents should be made available. It is therefore appropriate, in my view, to direct that, subject to any authorisation being required under any foreign privacy laws for consent given by the court or a party, the material sought in relation to the Seaman and Dairyland Insurance litigation insofar as it relates to the present proceedings should be produced and that the production process should commence immediately and continue on an ongoing basis as documents become available. Insofar as any documents are of a confidential or highly confidential nature, appropriate terms as to access and disclosure should be imposed to protect such confidentiality.

Lists, Indexes and Computerised Records

In relation to lists, indexes, and computerised records of documents in the possession of the applicants (draft order 1 in MFI 14) which may be relevant to these proceedings, I consider that if any such documents exist they should be discovered, subject to any privilege or confidentiality claims. This requirement does not extend to documents prepared for the dominant purpose of use in litigation.

In respect to the list of documents relating to depositions requested in the applicants’ notice to produce of 19 June 1997 in pars 2 and 3 (draft order 2 in MFI 14), I note that this list can be prepared within a few business days and I direct that it be produced.

Draft order 3 in MFI 14 seeks an order that, within seven days, the respondents provide a list of all documents provided on discovery or pursuant to document production requests in all other Bjork Shiley Convexo-Concave Heart Valve litigation with two exceptions.

The evidence of Mr Goott is that there have been more than 500 pieces of litigation, although only one trial, involving these disputes. It is not possible for the respondents to prepare a list identifying all documents produced on discovery in that litigation. This request is too wide. However, subject to the protective orders and privacy law requirement, the respondents should make available the CD-Roms and the microfilmed material referred to in par 16 of Mr Goott’s affidavit of 6 August 1997. This material should be made available as soon as possible and on an ongoing basis as and when it is reviewed.

Microfilm - post May 1992

In relation to draft order 5 of MFI 14, the microfilm containing the additional documents which Shiley microfilmed after Robins Kaplan ceased inspection should be available to the applicants for inspection.

Expert material

Draft order 6 in MFI 14 seeks copies of all depositions and exhibits of experts in all other C/C heart valve litigation. I have already dealt with expert material in relation to the Dairyland Insurance and Seaman litigation. In relation to any other litigation, I consider that subject to privilege, protective orders and privacy restraints, such material should be made available for inspection commencing forthwith and on a continuing progressive basis.

Acquisition of Shiley

In relation to documents concerning the acquisition of Shiley by Pfizer, draft order 7 of MFI 14, I direct that any relevant documents which have not already been provided for inspection should be provided with such production to begin forthwith and to continue on an ongoing basis.

PCR’s

Draft order 10 in MFI 14 seeks all product complaint reports from 1 July 1996. Any outstanding product complaint reports should be provided forthwith and on an ongoing basis, including product complaint reports created since 1 January 1997.

Conclusion

I am satisfied that discovery of the documents referred to above is required in order to provide a fair trial. In my view it is not appropriate to make any order as to general discovery at this stage but, as indicated above, I consider that there is a sufficient basis shown for making orders in relation to specific areas which have been raised as disputed matters between the parties in relation to the discovery process.

I find that the respondents have not complied, in important respects, with the discovery order made by Lockhart J on 13 December 1996. In particular I refer to the failure to previously disclose the existence of the numerous documents in the Shiley Heart Valve Research Centre; also in the final Pfizer New York location and in foreign locations. In addition, the correspondence in mid 1997 from the respondents’ solicitors concerning the contents of the microfilm was misleading.

This non-discovered material is substantial. At the Research Centre for example the respondents’ solicitor says that there are at least 1,000 boxes of material which it is suggested could take more than five legal advisers working full time more than six months to review. No estimate is given of the volume of the foreign location documents. New York documents would require two months to review again employing more than five attorneys. No satisfactory explanation has been given as to why these materials were not disclosed.

In addition, many other documents beyond those disclosed in the March 1997 affidavit of Pfifer have come to light at a very late stage and only it would seem after the discovery proceedings were further pressed by the applicants.

As the discovery motion is interlocutory it is not appropriate to make any declaratory order.

The respondents should conduct an immediate review of its discovery process, in this matter, to ascertain whether there are any other classes of documents in existence and as to any locations where relevant documents which have not already been discovered are stored or retained. If such documents exist their existence should be notified immediately to the applicants and they should be made available to the applicants upon request.

There is considerable material before me which suggests that there are significant logistical problems in making immediately available the records sought by the applicant. However, I am not satisfied that discovery as required will unduly impede the capacity of the respondents to properly prepare their case. In relation to the specific matters mentioned above I consider that all steps necessary for reviewing the material should begin immediately and material should be released on a progressive and ongoing basis rather than waiting until the completion of any review or classification process.

I direct the applicant to bring in Short Minutes to give effect to the above reasons. I will hear the parties as to the costs of this application when they have had an opportunity to consider these reasons.

I certify that this and the preceding fifteen (15) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin

Associate:

Dated:            14 August 1997

Counsel for the Applicant:	Mr B H K Donovan QC Mr M L Williams
Solicitor for the Applicant:	Cashman and Partners
Counsel for the Respondent:	Mr R J Ellicott QC Mr J V Nicholas
Solicitor for the Respondent:	Freehill Hollingdale & Page
Date of Hearing:	15, 18, 23 July and 1 and 7 August 1997
Date of Judgment:	14 July 1997