Peterson v Merck Sharpe and Dohme (Australia) Pty Ltd (No.2)

[2008] FCA 1468

FEDERAL COURT OF AUSTRALIA

Peterson v Merck Sharpe & Dohme (Australia) Pty Ltd (No.2) [2008] FCA 1468

GRAEME PETERSON v MERCK SHARPE & DOHME (AUSTRALIA) PTY LTD and MERCK & CO INC

VID 451 OF 2006

JESSUP J
10 SEPTEMBER 2008
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 451 OF 2006

BETWEEN: GRAEME PETERSON
Applicant

AND:

MERCK SHARPE & DOHME (AUSTRALIA) PTY LTD
First Respondent

MERCK & CO INC
Second Respondent

JUDGE:	JESSUP J
DATE OF ORDER:	16 SEPTEMBER 2008
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.Paragraphs 1 and 2 of the court’s orders dated 26 November 2007 be varied in accordance with paragraphs 3 and 4 of these orders.

2.Paragraph 12 of the court’s orders dated 4 July 2008 be varied in accordance with paragraph 5 of these orders.

3.The following category be added to categories of documents listed in the Schedule of Discoverable Documents annexed to the court’s orders made on 26 November 2007:

12.  All documents concerning the marketing, promotion and sale of VIOXX and interaction with Australian medical practitioners and their staff sent to made by or received from the Peterson Sales Representatives (being the persons referred to in paragraph 9 of the affidavit of Paula Shelton sworn on 1 September 2008), including the notes of sales calls made by the Peterson Sales Representatives recorded in the first respondent’s “Genysys” system, in the period between 1 January 2000 and 31 December 2003.

4.Discovery of the documents in category 12 of the Amended Schedule of Discoverable Documents, including the filing and service of any supplementary List of Documents, be completed by the first respondent on or before 31 October 2008.

5.The applicant file and serve any statement of the evidence of each witness other than any expert witness proposed to be called by him on or before 7 October 2008.

6.        The proceeding be listed for further directions at 9.30am on 24 October 2008. 

7.The parties file and serve any statement of the expert evidence of each witness proposed to be called by them on or before 4.00pm on 13 February 2009.

8.The parties file and serve any statement of the expert evidence in reply of each witness proposed to be called by them on or before 4.00pm on 13 March 2009.

9.        The proceeding be fixed for trial on a date to be fixed.

10.      The parties have liberty to apply.

11.      Costs be reserved.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 451 OF 2006

BETWEEN: GRAEME PETERSON
Applicant

AND:

MERCK SHARPE & DOHME (AUSTRALIA) PTY LTD
First Respondent

MERCK & CO INC
Second Respondent

JUDGE:	JESSUP J
DATE:	10 SEPTEMBER 2008
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. Before the court today is a Notice of Motion filed by the applicant on 2 September 2008 which, for purposes relevant to these reasons, relates to the subject of the first respondent’s discovery obligations in the proceeding. 

2. On 26 November 2007, the court gave the applicant leave to require the respondents to make discovery of documents according to a list of categories set out in the schedule to that order. 

3. On 4 July 2008, the court gave leave to the applicant to file and serve a Further Amended Statement of Claim substantially in the form of a draft exhibited to an affidavit then read to the court.  Pursuant to that leave, the applicant filed his Further Amended Statement of Claim on 7 July 2008. 

4. The Further Amended Statement of Claim introduced a new paragraph 19A, which alleged that the first respondent had developed and implemented a marketing strategy or campaign by which it formulated and disseminated to pharmacists, medical practitioners and other healthcare professionals certain information about VIOXX.  That information as so disseminated – described as the VIOXX representations – related to the favourable features of VIOXX, the absence of any established association with myocardial infarction, and like matters.

5. Documents to date obtained by the applicant on discovery show, according to the applicant, a pattern of promotion of VIOXX by the first respondent which involved influencing key opinion leaders within the medical profession (such as senior procedural specialists) to prescribe or to be favourably disposed towards the prescription of VIOXX, with a view to their practices and opinions having an impact on the prescribing practices of general practitioners.  This was said to be a channel by which the VIOXX representations had an indirect, rather than a direct, impact upon the latter. 

6. Documents obtained on discovery have also enabled the applicant to identify by name the sales representatives of the first respondent who visited the Frankston clinic at which the applicant was treated and who there engaged in promotional activities with regard to VIOXX.  No doubt the applicant will contend that this was a means by which the VIOXX representations came directly to the attention of the practitioners responsible for prescribing VIOXX for the applicant. 

7. However, the applicant now also contends that the first respondent’s message about VIOXX might equally have come to the attention of those practitioners indirectly in the way I have described.  He wants the first respondent to make discovery of:

   … all documents concerning the marketing, promotion and sale of VIOXX and interaction with Australian medical practitioners and their staff sent to, made by or received from Peterson sales representatives…

   whose identity he knows.  He says that, in the nature of things, those representatives are likely to have made the VIOXX representations just as much to other practitioners, including quite possibly the opinion leaders referred to, as to the applicant’s direct treating practitioners. 

8. Counsel for the first respondent resisted the applicant’s motion in relevant respects substantially on the basis that the applicant’s pleaded case did not deal with the nature and extent of the influence which the VIOXX representations had upon their ultimate addressees, even when reaching them indirectly.  I could not accept that submission, at least without taking an inappropriately narrow view of the Further Amended Statement of Claim.  I consider that the applicant has alleged clearly, if rather broadly, that, as a result of the VIOXX representations being made to practitioners, group members, including himself, were prescribed VIOXX. 

9. I consider that the applicant’s request for discovery is relevantly an appropriate and sensible one, and is justified by the amendments made to the Statement of Claim in the context of the first respondent’s marketing modus operandi as revealed in documents discovered to date.  I would add two riders to that conclusion.  First, I would place a temporal limit upon the documents now to be discovered.  This is a matter I will discuss with counsel after having delivered these reasons.  Secondly, I am influenced in the conclusion I reach by the limitation of the request to documents sent to, made by, and received from the identified representatives.  I would not have been disposed to make a similar order without such a limitation. 

10. The next matter arises because the first respondent has discovered entries in its “Genesys” database which are electronic file notes of calls made by its sales representatives at the clinic attended by the applicant, and which relate to VIOXX.  For example, often the representative will have made a brief note of a conversation that he or she had with a practitioner at the clinic. 

11. The applicant now seeks discovery of:

    … the notes of sales calls made by all sales representatives in its employ [that is, in the first respondent’s employ] promoting VIOXX to Australian medical practitioners and their staff within Australia.
    a.        Recorded in the First Respondent’s “Genesys” system; 
    b.        Recorded in internally-used spreadsheets or tables; or

    c.Recorded by other means.

    I note that in relation to c., counsel for the applicant has now indicated, in effect, that I need not be concerned with that subparagraph.  It is said on the applicant’s behalf that these entries constituted a source of information for the first respondent as to practitioners’ concerns about VIOXX, for example, and might have put it on notice of the kind of dangers that might exist wherever the sales call was made and whoever the sales representative was. 

12. To the extent that they have been discovered to date, these file notes were, in the view taken by the first respondent, covered by a category of discovery ordered on 26 November 2007 in the following terms: 

    All documents:

    a.evidencing communications between the Applicant’s general practitioner Dr John W Dickman of Towerhill Medical Centre, Frankston, and the First Respondent;

    b.relating to Dr Dickman; and/or

    c.relating to seminars, meetings or events attended by Dr Dickman which were sponsored, organised or attended by the First Respondent.

    The first respondent contended that the file notes were not otherwise discoverable. 

13. Subject to the impact, if any, of the Further Amended Statement of Claim, I am not disposed to vary the first respondent’s discovery obligations just because documents have emerged which give cause to believe that there may be other documents, not presently discoverable, which might well have been included in the Schedule of 26 November 2007.  On that day the court, in effect, consolidated and codified the first respondent’s discovery obligations, largely in response to complaints by the applicant that the process of discovery was taking too long.  I accepted the applicant’s submission that a firm date should be specified by when the parties’ discovery would be complete.  The applicant’s price for the achievement of such a date was the specification, effectively as though set in stone, of the content of their respective discovery obligations. 

14. I note that, depending on the content of a particular file note, it might have been, and might still be, discoverable under other categories in the Schedule.  I do not accept the first respondent’s submission that the making of electronic entries in a database, like Genesys, will never amount to an internal communication of the kind referred to in category b.  This, however, is a separate matter and does not justify the extension of the first respondent’s discovery obligations to every such entry wherever made in Australia, limited only by reference to the promotion of VIOXX. 

15. The applicant sought to justify his request for discovery of these electronic file notes also by reference to the amendments made to his pleading in July 2008, relying, in this regard, upon paragraph 19A of the Further Amended Statement of Claim.  It was submitted on his behalf that the file notes already discovered disclosed one aspect of the means by which sales representatives made the VIOXX representations to practitioners.  In this respect, there is an overlap between the first and the second orders sought by the applicant.  To the extent that the file notes of the identified sales representatives would come within the ruling I have made about the first order so sought, they should be discovered.  Indeed, I would be prepared to enlarge that order to extend specifically to Genesys database entries of sales calls made by those representatives.  

16. Only to that extent would I be prepared to base a new discovery order upon the applicant’s amended pleading.  For reasons given in connection with the first order, I am not disposed to extend the first respondent’s obligation to discover file notes of sales calls made by representatives beyond the representatives identified as previously indicated. 

17. In his Notice of Motion, the applicant also sought that the first respondent be obliged to provide discovery of all documents relating to forms described as drug information requests, including responses provided by the first respondent to the person seeking the request and any internal correspondence between employees of either respondent relating to those requests. 

18. Counsel for the first respondent pointed out in his submissions today that the first respondent accepted that drug information requests which related to VIOXX, and that responses provided to those requests, which are so related, would be and were discoverable.  He pointed out that his client had until 10 October 2008 to complete its discovery in relevant respects, and, upon hearing these assurances, counsel for the applicant accepted that there was no need for the court to make any order along the lines sought at this stage. 

I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.

Associate:

Dated:       30 September 2008

Counsel for the Applicant:	J Burnside QC and B Quinn
Solicitor for the Applicant:	Slater & Gordon
Counsel for the Respondents:	P Garling SC, A Morrison and C Loveday
Solicitor for the Respondents:	Clayton Utz

Date of Hearing:	10 September 2008
Date of Judgment:	10 September 2008