Stanford v DePuy International Ltd

[2013] FCA 1304

FEDERAL COURT OF AUSTRALIA

Stanford v DePuy International Ltd [2013] FCA 1304

Citation:	Stanford v DePuy International Ltd [2013] FCA 1304
Parties:	TAMMY MAREE STANFORD and JAMIE DUNSMORE v DEPUY INTERNATIONAL LTD and JOHNSON & JOHNSON MEDICAL PTY LIMITED
File number:	NSD 213 of 2011
Judge:	ROBERTSON J
Date of judgment:	5 December 2013
Catchwords:	PRACTICE AND PROCEDURE – application for a statutory suppression order – whether order necessary to prevent prejudice to the proper administration of justice
Legislation:	Federal Court of Australia Act 1976 (Cth) ss 37AA, 37AE, 37AF, 37AG
Cases cited:	Hogan v Australian Crime Commission (2009) 177 FCR 205 Hogan v Australian Crime Commission (2010) 240 CLR 651 Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 Ritz Hotel v Charles of the Ritz (1988) 15 NSWLR 158 Walker v W A Pickles Pty Ltd [1980] 2 NSWLR 281
Date of hearing:	2 December 2013
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	100
Counsel for the First Applicant:	Mr AJL Bannon SC with Mr NM Bender
Solicitor for the First Applicant:	Maurice Blackburn
Counsel for the Respondents:	Mr RA Dick SC with Ms D Bampton
Solicitor for the Respondents:	Herbert Smith Freehills

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 213 of 2011

BETWEEN:

TAMMY MAREE STANFORD
First Applicant

JAMIE DUNSMORE
Second Applicant

AND:

DEPUY INTERNATIONAL LTD
First Respondent

JOHNSON & JOHNSON MEDICAL PTY LIMITED
Second Respondent

JUDGE:	ROBERTSON J
DATE OF ORDER:	5 DECEMBER 2013
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The first applicant’s interlocutory application filed on 15 October 2013 be dismissed with costs.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 213 of 2011

BETWEEN:

TAMMY MAREE STANFORD
First Applicant

JAMIE DUNSMORE
Second Applicant

AND:

DEPUY INTERNATIONAL LTD
First Respondent

JOHNSON & JOHNSON MEDICAL PTY LIMITED
Second Respondent

JUDGE:	ROBERTSON J
DATE:	5 DECEMBER 2013
PLACE:	SYDNEY

REASONS FOR JUDGMENT

Introduction

1. I have before me an interlocutory application filed on 15 October 2013 on behalf of the first applicant seeking a suppression order on the ground stated in s 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth) in terms which reflect a consent order for protection of confidential documents or information in proceedings in the United States.

2. The first applicant is not a party to those US proceedings. She seeks to obtain an order from the United States Court that she be given transcripts of depositions and exhibits to depositions of certain of the respondents’ witnesses in those proceedings in the United States but where the judge in those proceedings has indicated that he may not make such an order unless there were an order in this Court to the same effect as the consent order in the US proceedings.

   Background

3. For the purposes of the present interlocutory application I proceed on the basis of the following background.

4. The substantive proceedings are representative proceedings pursuant to Pt IVA of the Federal Court of Australia Act 1976. They are brought on behalf of persons who had surgery performed on them in Australia to implant ASR Implants. The ASR (Acetabular Hip System) is one of the two hip implant systems the subject of the representative proceedings in this Court.

5. The first respondent, DePuy International Limited, manufactured and the second respondent, Johnson & Johnson Medical Pty Limited, distributed in Australia hip implants for use in hip implant surgery to replace damaged hip joints.

6. There are also on foot other proceedings concerning the ASR Implants in the United States, several thousand of which are being case managed in multi-district litigation by Katz J in the United States District Court for the Northern District of Ohio entitled In Re DePuy Orthopaedics, Inc. ASR Hip Implants Products Liability Litigation (the US proceedings).

7. The first applicant has made an application in the US proceedings for access to certain documents prepared for the purposes of or used within proceedings within the multi-district litigation. That application was made pursuant to s 1782 of title 28 of the United States Code. Some of the documents to which the first applicant seeks access are the subject of an order of confidentiality made by Katz J in the US proceedings on 2 June 2011 and amended on 22 November 2011. Those documents are referred to as “PROTECTED DOCUMENTS”.

8. The interlocutory application in this Court seeks orders to protect the use and disclosure of the “PROTECTED DOCUMENTS” pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) and an order that the first applicant comply with the orders for discovery made on 3 June 2011 and 3 April 2013 to the extent that those orders apply to the documents obtained by the first applicant pursuant to its s 1782 application. That is, if the first applicant obtains the documents under the first order, she seeks a further order that she will then be under discovery obligations in respect of those documents.

9. The first applicant read two affidavits by Julian Klaus Schimmel, one affirmed on 15 October 2013 and the other on 13 November 2013. The respondents read two affidavits by Guy Fraser Gerard Narburgh, one affirmed on 6 November 2013 and the other on 27 November 2013. The deponents are solicitors.

10. Mr Schimmel at [4] of his affidavit of 15 October 2013 states that the first applicant, by the interlocutory application, seeks that the Court make confidentiality orders in relation to certain documents to which the first applicant has sought access in the US proceedings.

11. Mr Schimmel states at [11] that he has formed the view that the content of the depositions of the people named would be of considerable assistance to the applicants in preparing for and conducting the proceeding in this Court having regard to the role of each deponent, which he sets out, and the likelihood that their deposition evidence would be highly relevant to the proceedings in this Court. He has also formed the view that the content of transcripts of two depositions of the first respondent in the proceeding in this Court would also be relevant to the facts in issue and would be of considerable assistance to the applicants in this Court in preparing for and conducting these proceedings. Mr Schimmel at [15] also states that the content of transcripts of the depositions of certain experts would be highly relevant to the facts in issue in the present proceedings and would be of considerable assistance to the applicants in preparing for and conducting these proceedings.

12. According to the first applicant’s submissions, the deponents fall into the following categories: the first respondent itself; 10 employees of the first respondent who were involved in the development, marketing or regulation of ASR Implants or in senior management; 10 employees of DePuy Orthopaedics Inc which is a defendant in many of the US proceedings and which is related to the first respondent, those employees being involved in the development and marketing of the ASR Implants or in senior management; two consultant surgeons retained by the first respondent and who were involved in the development of the ASR Implants; an employee of the second respondent or a related company who was involved in responding to concerns about the safety of the ASR Implants in Australia in 2007; a professor who carried out retrieval analysis on explanted ASR Implants; and four expert witnesses who testified in the US proceedings but of whom the first applicant now presses only for production in respect of Professor Bobyn, a professor of biomechanical engineering who gave evidence as to defects in the ASR Implants.

13. The purpose of the s 1782 application is to obtain, from the respondent to the s 1782 application, the transcripts of 30 oral depositions taken in the multi-district litigation and the exhibits to those depositions. The respondent to the s 1782 application is the US plaintiffs’ lead counsel in the multi-district litigation.

    The statutory framework

14. Section 1782 is in the following terms:

    (a) The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court. By virtue of his appointment, the person appointed has power to administer any necessary oath and take the testimony or statement. The order may prescribe the practice and procedure, which may be in whole or part the practice and procedure of the foreign country or the international tribunal, for taking the testimony or statement or producing the document or other thing. To the extent that the order does not prescribe otherwise, the testimony or statement shall be taken, and the document or other thing produced, in accordance with the Federal Rules of Civil Procedure.

    A person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege.

    (b) This chapter does not preclude a person within the United States from voluntarily giving his testimony or statement, or producing a document or other thing, for use in a proceeding in a foreign or international tribunal before any person and in any manner acceptable to him.

15. The form of order sought in the s 1782 application is an order:

    [a]uthorizing Petitioner to take discovery from the Respondent for use in the proceeding … that is currently pending in the Federal Court of Australia at Sydney in Australia, by using and serving a subpoena on the Respondent, substantially in the form attached hereto, for copies of the documents listed in the subpoena and on the schedule attached to the subpoena (namely the transcripts of and exhibits to depositions of persons listed in Schedule 1 to the subpoena…)…

16. The terms of the subpoena are as follows:

    The complete transcripts of the depositions of the persons identified in Schedule 1 hereto, taken in connection with In re-DePuy Orthopaedics Inc. ASR Hip Implant Products Liability Litigation (MDL Docket No. 1:10 md 2197, In all stop D. Ohio), along with the exhibits to the depositions.

17. Sections 37AE, 37AF and 37AG of the Federal Court of Australia Act  provide:

    37AE  Safeguarding public interest in open justice

    In deciding whether to make a suppression order or non-publication order, the Court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice.

    37AF  Power to make orders

    (1)The Court may, by making a suppression order or non publication order on grounds permitted by this Part, prohibit or restrict the publication or other disclosure of:

    (a)information tending to reveal the identity of or otherwise concerning any party to or witness in a proceeding before the Court or any person who is related to or otherwise associated with any party to or witness in a proceeding before the Court; or

    (b)       information that relates to a proceeding before the Court and is:

    (i)information that comprises evidence or information about evidence; or

    (ii)       information obtained by the process of discovery; or

    (iii)      information produced under a subpoena; or

    (iv)      information lodged with or filed in the Court.

    (2)The Court may make such orders as it thinks appropriate to give effect to an order under subsection (1).

    37AG  Grounds for making an order

    (1)The Court may make a suppression order or non publication order on one or more of the following grounds:

    (a)the order is necessary to prevent prejudice to the proper administration of justice;

    (b)the order is necessary to prevent prejudice to the interests of the Commonwealth or a State or Territory in relation to national or international security;

    (c)  the order is necessary to protect the safety of any person;

    (d)the order is necessary to avoid causing undue distress or embarrassment to a party to or witness in a criminal proceeding involving an offence of a sexual nature (including an act of indecency).

    (2)A suppression order or non publication order must specify the ground or grounds on which the order is made.

    The only paragraph of s 37AG(1) relevant for present purposes is (a). The parties also accepted that by virtue of the definitions in s 37AA of the Federal Court of Australia Act, what the first applicant sought was a suppression order, that is an order that prohibits or restricts the disclosure of information (by publication or otherwise).

18. The predecessor to these provisions was s 50 of the Federal Court of Australia Act. It provided that the Federal Court at any time during or after the hearing of a proceeding in the Court may make “such order forbidding or restricting the publication of particular evidence, or the name of a party or witness, as appeared to the Court to be necessary in order to prevent prejudice to the administration of justice or the security of the Commonwealth”. Section 17(1) required the jurisdiction of the Federal Court to be exercised in open court.

    Principles to be applied

19. The parties before me accepted that the following statements by the High Court about s 50 in Hogan v Australian Crime Commission at [29]-[33] applied to s 37AG(1)(a):

    It has been assumed, no doubt correctly, that an order made under s 50 of the Federal Court Act may be made until further order and, in any event, may be vacated if the continuation of the order no longer appears to the Court to be necessary in order to prevent prejudice to the administration of justice or the security of the Commonwealth. As a general proposition, a court remains in control of its interlocutory orders and a further order will be appropriate, for example, where new facts and circumstances appear or are discovered, which render unjust the enforcement of the existing order.

    As it appears in s 50, “necessary” is a strong word. Hence the point made by Bowen CJ in Australian Broadcasting Commission v Parish, that the collocation of necessity to prevent prejudice to the administration of justice and necessity to prevent prejudice to the security of the Commonwealth “suggests Parliament was not dealing with trivialities”. Further, as indicated earlier in these reasons: (a) s 50 is an example of a provision authorising the Federal Court to make orders for the exercise of its jurisdiction other than in open court as mandated by s 17(1); and (b) “the administration of justice” spoken of in s 50 is that involved in the exercise by the Federal Court of the judicial power of the Commonwealth; this is a more specific discipline than broader notions of the public interest.

    It is insufficient that the making or continuation of an order under s 50 appears to the Federal Court to be convenient, reasonable or sensible, or to serve some notion of the public interest, still less that, as the result of some “balancing exercise”, the order appears to have one or more of those characteristics.

    If it appears to the Federal Court, on the one hand, to be necessary to make a particular order forbidding or restricting the publication of particular evidence or the name of a party or witness, in order to prevent either species of prejudice identified in s 50, or, on the other hand, that that necessity no longer supports the continuation of such an order, then the power of the Federal Court under s 50 is enlivened. The appearance of the requisite necessity (or supervening cessation of it) having been demonstrated, the Court is to implement its conclusion by making or vacating the order. The expression in s 50 “may … make such order” is to be understood in this sense.

    It may tend to distract attention from the particular terms of s 50 to describe the Federal Court as embarking upon the exercise of a “discretion” when entertaining an application under s 50. Once the Court has reached the requisite stage of satisfaction, it would be a misreading of s 50 to treat it as empowering the Court nevertheless to refuse to make the order, or to leave in operation the now impugned order. It would, for example, be an odd construction of s 50 which supported the refusal of an order under s 50 notwithstanding that it appeared to the Court to be necessary to make an order to prevent prejudice to the security of the Commonwealth.
    (Footnotes omitted)

20. The approach of the High Court in Hogan v Australian Crime Commission is now given statutory force by the terms of s 37AE which I have set out above. I am therefore required to take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice.

21. The first applicant also made reference to the Court’s implied power but accepted that any order made under an implied power would also be limited by being necessary to prevent prejudice to the proper administration of justice. It was submitted however that the implied power may provide greater scope than s 37AF.

    Chronology

22. A short chronology follows.

23. On 2 April 2013 Maurice Blackburn, the solicitors for the first applicant wrote to Herbert Smith Freehills, the first respondent’s solicitors, requesting that the first respondent discover the transcripts of all depositions conducted in the multi-district litigation. That correspondence continued until mid-June 2013.

24. On 12 July 2013, Maurice Blackburn emailed Herbert Smith Freehills stating that the first applicant had decided to pursue the deposition transcripts by way of an application under s 1782. That application was filed also on 12 July 2013.

25. On 24 July 2013 the parties to the s 1782 application appeared before Katz J. Also appearing was the defendants’ lead counsel in the multi-district litigation.

26. Judge Katz said that there appeared to him to be a ready solution to the matter and he intended to withhold ruling until the petitioner and respondents had an opportunity to attempt to resolve it. The significant issues were the protective order and the expense for the respondents in the multi-district litigation who incurred significant personal expense in the discovery process. It seems that Katz J had in mind that the substance of the protective order made in the US proceedings would need to be adopted by this Court. His Honour said, according to the transcript:

    … it seems to me that if there is an agreement between and among the petitioner and the plaintiffs or respondents, and if that includes the incorporation of the protective order binding upon the parties in this MDL, that’s where it would have to start, not with the Australians. And then that would be subject to the protective order issued here being adopted by the Australian court as governing the documents produced pursuant to the agreement between the petitioner and respondents. That’s what seems to me the way to ensure the compliance, one, with this court’s previous order and two, with ongoing confidentiality. I’ll think about it.

27. To this end, on 19 August 2013 Mr Schimmel sent to the parties in this Court a copy of proposed confidentiality orders which mirror the central aspects of the Protective Order in the US proceedings. A revised confidentiality regime was sent on 4 September 2013 by Maurice Blackburn. On 13 September 2013 Herbert Smith Freehills made a counterproposal which was declined by Maurice Blackburn on 24 September 2013.

1. On 2 October 2013, the first applicant filed a renewed application under s 1782. On 8 October 2013 the first respondent filed a brief in opposition to that renewed application. On 10 October 2013 the first applicant filed a reply.

2. Mr Schimmel deposed to his understanding that the first applicant would only be granted access by the US District Court to the documents sought in the s 1782 application if the Federal Court of Australia made confidentiality orders that conferred substantially the same protection as the Protective Order made in the US proceedings.

3. Mr Schimmel also deposed to his belief that the basis of the designation “PROTECTED DOCUMENTS” was on the basis of commercial confidentiality or the protection of trade secrets.

4. Mr Schimmel referred to a July 2011 agreement between the parties in the proceedings in this Court as to a confidentiality regime in respect of all documents discovered by the respondents to the applicants in the representative proceedings. The agreement was that persons to whom the applicants proposed to give access to the discovered documents were to execute a confidentiality undertaking in an agreed form.

5. Mr Narburgh in his 6 November 2013 affidavit gave his view that Mr Schimmel’s affidavit did not contain sufficient material to enable this Court to determine that the US documents would be discoverable. He expressed the view that Mr Schimmel had not demonstrated that the US documents were “directly relevant” to the issues raised by the pleadings or in the affidavit such that the respondents would be required to discover such documents pursuant to the Federal Court Rules. He also expressed the view that the affidavit of Mr Schimmel did not contain material to satisfy the requirements for a party to obtain an order for non-standard discovery pursuant to the Federal Court Rules. He expressed the view that the uses asserted by Mr Schimmel in his declaration were speculative. Any such asserted uses would depend on the content of the depositions, of which Mr Schimmel was not aware, as well as issues beyond the control of the applicants such as whether leave would be granted for interrogatories. Mr Narburgh also gave further detail of the scope of discovery provided to date by the respondents and that it was likely to have addressed many, if not all, the uses of the depositions asserted by Mr Schimmel.

6. In his second affidavit, affirmed 13 November 2013, Mr Schimmel deposes to an agreement that was reached between the first applicant and the plaintiffs’ lead counsel in the multi-district litigation concerning the compensation to be paid by the first applicant to the plaintiffs’ lead counsel in respect of the transcripts sought in the US court. That agreement referred to there being no objection to production of the transcripts with the referenced exhibits as long as the compensation occurred and three stipulated conditions were met so as to ensure compliance with the US court’s protective order: (1) the Australian Counsel to sign the multi-district litigation protective order and be bound to it; (2) the Australian Counsel agreed to the jurisdiction of Katz J as to any issues or violations regarding the protective order; and (3) entry of the protective order in Australia to ensure the appropriate confidentiality was in effect there as well. The defendants in the multi-district litigation filed a sur-reply in opposition to the renewed application for a discovery order, that document being dated 22 October 2013. It was pointed out that petitioner’s renewed application for a discovery order to the US court was premature or it was a discovery issue that must first be addressed by the Federal Court of Australia and the petitioner had not obtained an order from the Federal Court of Australia adopting a protective order consistent with the multi-district litigation protective order.

7. By his second affidavit, dated 27 November 2013, Mr Narburgh exhibited two documents he had obtained from the first respondent's legal representatives in the multi-district litigation. One document was filed on 22 November 2013 and was a supplemental memorandum by the first applicant in the proceedings in this Court in further support of her renewed application for an order under s 1782. The other document was filed on 26 November 2013 and was a supplemental memorandum by the defendants in the multi-district litigation in further opposition to the petitioner’s renewed application for a discovery order.

   Order sought in this Court

8. The order for which the first applicant contended in this Court contained the following key provisions, a “Party” being defined as a party to the present proceedings in the Federal Court of Australia and “Proceedings” meaning these proceedings in the Federal Court of Australia:

   4.This Order applies in relation to any document designated as a “PROTECTED DOCUMENT” pursuant to the Amended Stipulated Order, except for any document that is identical to a document produced by a Party to any other Party pursuant to compulsory process in the Proceedings (by way of Court order, including any order as to discovery, notice to produce or subpoena).

   5.Any document designated as a “PROTECTED DOCUMENT” shall be used or disclosed by any Party or the legal representatives of any such Party:

   (a)only as provided for in this Order;

   (b)only for the purposes of the preparation and trial of the Proceeding; and

   (c)not for any business or competitive purpose related to the business of the Respondents or any of them.

   …

   10.The making of this Order does not preclude any Party from seeking a further order of this Court provided that written notice of any further order sought is to be provided to:

   (a)the Plaintiffs’ Lead Counsel in the US MDL, …; and

   (b)the Defendants’ Lead Counsel in the US MDL, …;

   at the same time as serving the parties to the Proceeding.

   …

   12.This Order does not confer blanket protections on all documents, disclosures or responses to discovery and the protection it affords extends only to the specific information or items that are entitled to protection under the legal principles applicable to the Proceedings concerning the attachment of confidentiality or privilege to documents or information within. Further, any designation of a “PROTECTED DOCUMENT” shall not be construed as an admission or an agreement by any Party:

   (a)that the designated disclosure constitutes or contains confidential information; or

   (b)that any document, material or information, or any portion thereof, constitutes relevant, or admissible evidence in the Proceedings.

9. The first applicant submitted that the other relevant provisions of the Amended Stipulated Protective Order of Confidentiality were, first, cl 2(d) which states that the Protective Order does not confer blanket protection on all documents, disclosures or responses to discovery and the protection it affords extends only to the specific information or items that are entitled to protection under the applicable legal principles for treatment as confidential after individual review by the producing party. Secondly, the first applicant drew attention to cl 9, which deals with how the designation of confidential information shall be made, and deals in terms with deposition testimony and states as follows:

   … Deposition testimony or any portion thereof may be designated “Confidential” on the record at the time of the deposition. If the party seeking to maintain a depositions transcript as Protected does not serve a letter on the court reporter and Plaintiffs’ Liaison Counsel within 30 days of receipt of the depositions transcript, then the entire transcript shall be deemed not to contain any Protected Information and any legend stating Protected Information shall be removed.

   The submissions on behalf of the first applicant

10. The first applicant submitted that the confidentiality order in place in respect of documents adduced in evidence or produced in the US proceedings contemplated the regime whereby a producing party was to designate confidential documents as “Protected Documents” in which case they were to be kept confidential. Documents were to be designated as “Protected Documents” on the basis that they were protected by US law as trade secrets or private medical or personal information: see order 3 of the US protective order. The actual terms of Order 3 are as follows:

    The term “PROTECTED DOCUMENT” refers to information protected by Rule 26 of the Federal Rules of Civil Procedure, or other applicable laws or rules as a “trade secret” (as defined in the Uniform Trade Secrets Act) or privacy laws, including personal or medical information. “PROTECTED DOCUMENTS” containing confidential information as used in this Order means documents containing trade secrets and other information that is of a proprietary, business, financial or technical nature and not readily known or available to competitors, potential competitors, or the public, the value of which arises from its being confidential and the disclosure of which (whether separately or in conjunction with other information being produced) is believed in good faith by the Supplying Party to have the potential, if disclosed, for causing competitive harm to it or giving a competitive advantage to others. Plaintiffs shall be permitted to designate materials that contain personal information as a “PROTECTED DOCUMENT” pursuant to this Order.

    I note that the confidential information is not limited to trade secrets as such.

11. The first applicant submitted that Katz J needed to be satisfied that the US protective order would be continued through the Australian courts and that the expense incurred in conducting the depositions sought would be partly compensated by the first applicant. The second issue had been dealt with and was the subject of an agreement to pay a sum by way of compensation. The first applicant now applied for orders that would have the effect of maintaining the confidentiality of documents that had been designated as “Protected Documents” in the US proceedings by imposing restrictions on their disclosure on parties to the proceedings in this Court. The language of the form of order set out in Annexure A to the interlocutory application was similar to that of the US protective order.

12. The first applicant submitted that, once produced, the depositions transcripts and the associated exhibits would be “information that relates to a proceeding before the Court” within s 37AF(1)(b) being the representative proceedings in this Court.

13. The first applicant also submitted that the depositions transcripts and associated exhibits would, upon production, be one or both of “information obtained by the process of discovery” and/or “information produced under a subpoena” within s 37AF(1)(b)(ii) and (iii).

14. The first applicant submitted that the present application arose from a concern on the part of the US Court that documents to be produced pursuant to the s 1782 application that were the subject of the US protective order should remain confidential through an order of this Court. The basis for the US Court’s concern was a desire to protect the trade secrets of the first respondent and its related entities as well as the private medical information of the plaintiffs in the US proceedings and, potentially, medical records and trade secrets of third parties to that litigation. These were well-recognised grounds upon which this Court regularly made confidentiality orders in order to prevent prejudice to the proper administration of justice. The first applicant referred to authorities which included Hogan v Australian Crime Commission (2010) 240 CLR 651 at [30]-[31] and to ACCC v Cement Australia Pty Ltd (No 2) [2010] FCA 1082.

15. The first applicant also submitted that the orders sought were necessary to prevent prejudice to the proper administration of justice in the sense that, without them, either, on the one hand, the first applicant would be deprived of her rights under s 1782, or, on the other hand, if the US Court granted the s 1782 application, the interests of the owners of the confidential information may not be protected.

16. In the reply submissions on behalf of the first applicant it was accepted that whether reliance was placed on s 37AF or an implied power she had to demonstrate that the confidentiality orders were necessary to protect the administration of justice.

17. The first applicant submitted that a number of factors tended in favour of the Court exercising its discretion to make the orders sought in the Interlocutory Application. First, the Court routinely exercised its discretion to make orders in the nature of those sought in order to prevent prejudice accruing to the owners of trade secrets and private medical information. Secondly, the comments of Katz J indicated that the first applicant was likely to be unable to obtain the relief sought in the s 1782 application should this Court decline to grant the relief now sought. There was no basis for depriving the first applicant of substantive rights by the Court declining to put in place an appropriate confidentiality regime. Thirdly, assuming that the first applicant was entitled to the relief she claimed under s 1782, this Court should make the order sought in aid of the processes of the US Court as a matter of comity. Fourthly, if the Court did not make the orders now sought and the s 1782 application was nonetheless granted, prejudice would accrue to the owners of the confidential information by reason of travelling outside the enforceable reach of the US protective order.

    The respondents’ submissions

18. The respondents submitted that the Court should not make the order sought for three primary reasons: first, the application constituted an abuse of the Court’s processes; secondly, the applicant had not met the very heavy onus for establishing that the orders sought were “necessary” within the meaning of s 37AG and had not otherwise satisfied the requirements of s 37AF; and thirdly the Court should dismiss the application as a necessary exercise of its powers to control its own processes, in particular the discovery process.

19. The respondents referred to the discovery orders already made since the commencement of the substantive proceedings in this Court in February 2011 and submitted that the first applicant now sought to circumvent the managed discovery process and obtain the US documents by a backdoor mechanism that removed any control and supervision of the discovery process from this Court and, in effect, placed it in the hands of a foreign court. At its core, the interlocutory application sought that this Court rubber stamp an order pursuant to s 37AF so that the first applicant could obtain documents outside the supervised discovery process in the Australian proceeding.

20. The respondents submitted that the first applicant’s most recent approach to the US Court confirmed the inappropriateness of this Court being asked to make suppression orders in this context and appeared to highlight the first applicant’s understanding that she could not properly establish “necessity” in her application before this Court to the extent required under s 37AG of the Act. The only purpose of the first applicant’s interlocutory application was to obtain the US documents and not because it was “necessary” for there to be a suppression order made in the circumstances of the case.

21. The proper and the quickest, least expensive and most efficient procedure for the first applicant to seek to obtain the US documents for use in the Australian proceeding was for the first applicant to file an application for discovery in this Court if the parties could not reach an agreed position.

22. The respondents submitted their position was that they would not press any point, including on any application by the first applicant to this Court for discovery, regarding whether the first respondent has control of the US documents. The question of relevance of the US documents for the purposes of the Australian proceeding was a different matter. Any disagreement between the parties as to whether an order for discovery should be made and whether documents are discoverable should be dealt with by an application to this Court, rather than a US court, based on proper and complete evidence. Instead, rather than enabling this Court to deal with the issue of discovery of the US documents on its merits, the first applicant had sought to sidestep such a determination and seek the documents in another jurisdiction where it envisaged it would not face the same hurdles.

23. The application should be dismissed as an abuse of process, the respondents submitted, since an abuse of process may arise where a party goes outside an established discovery procedure or regime and through other means seeks to obtain production of documents.

24. The respondent submitted that the first applicant’s use of the process of the US Court interfered with the proceeding in this Court. One interference was that the making of the orders sought would allow for the subversion of the discovery process in the Australian proceeding in circumstances where much of the material may not be discoverable under the rules of this Court. A further interference was that this Court would not have control over when and whether the US court would make a determination regarding the first applicant’s application for the US documents in the US court. Further, the first applicant sought to obtain the benefit of the deposition process in the United States, being a process that she was not entitled to in Australia. The first applicant would use the disparity in the procedures available to enable it to take depositions of persons of interest in the United States, whereas witnesses in Australia would not be subject to depositions by the other party. This amounted to an impermissible interference with the procedures of this Court.

25. The evidence of the first applicant did not establish that this Court would make an order for discovery relating to the US documents or that if such an order was made the US documents would be discoverable in the Australian proceeding. The making of the orders sought by the first applicant would have the practical effect of enabling the first applicant to obtain documents that she may not otherwise have obtained upon discovery, having avoided through her application any requirement to comply with the rules relating to discovery in this Court. The respondent submitted that the broad statements in Mr Schimmel’s first affidavit were not enough to establish direct relevance and should lead the Court to conclude that the uses alleged by the first applicant to which the documents may be put are unduly speculative and could not be said to establish the criteria for direct relevance, that is, that the US documents were documents on which the party intended to rely or which adversely affected the party’s own case or documents that support another party’s case or documents that adversely affected another party’s case.

26. The respondent submitted that discovery of the US documents was unlikely to be ordered on the basis that an order for discovery of the documents would be futile. The respondents had already given extensive discovery to the first applicant, amounting to approximately 20 million pages of documents, and the discovery provided to date was likely to have addressed many, if not all, of the uses to which Mr Schimmel asserted the US documents will be put.

27. The respondent submitted that it was s 37AF and the grounds in s 37AG which govern the Court's determination as to whether to make the orders the first applicant sought.

28. The word “necessary” in s 37AG was a strong word and it was insufficient that a proposed order appeared merely to be convenient, reasonable or sensible or to serve some notion of the public interest: Hogan v Australian Crime Commission at [30]-[31].

29. Accordingly, the first applicant’s application, the respondents submitted, suffered from two fundamental flaws.

1. First, she had failed to present evidence to the Court to establish that the orders were necessary within the meaning of s 37AG. The first applicant had sought the orders without knowing or being able to provide any evidence as to the nature of commercial confidentiality or trade secrets but relied on a purported basis of confidentiality or protection of trade secrets determined by a foreign court. It had not been shown that an order was necessary to prevent prejudice to the proper administration of justice within s 37AG(1)(a).

2. Secondly, the first applicant, the respondents submitted, had not met the fundamental requirements of establishing that the information fell within s 37AF(1)(b). In particular the information was not obtained by the process of discovery and/or information obtained under subpoena. In short, the “information” had not yet been obtained or produced and was therefore not “obtained” or “produced” within the meaning of the statutory provisions. It was not enough where, at the time of making the order, the provisions had not been satisfied.

3. In any event, the respondents submitted, the Court should exercise its power to control its own processes and decline to make the orders sought in the present circumstances. Even if the first applicant was successful in establishing a ground under s 37AG the Court may refrain from making the orders sought without offending the principles espoused in Hogan v Australian Crime Commission. The appropriate course was for the first applicant to apply to this Court for orders for discovery and if the Court made such orders consideration could then be given to whether the respondents would seek relevant s 37AF orders. This approach had the practical outcome that this Court continued to manage the discovery of documents on its own timetable without having reference to a foreign court.

4. In reply, the first applicant submitted that the abuse of process arguments put by the respondents arose in the s 1782 application not the present application which related to the confidentiality of documents.

5. Further, there was no proper basis upon which to conclude that the s 1782 application was an abuse of process. It could not have been the intention of the US legislature that the rights conferred by s 1782 should be excluded by the existence of foreign proceedings and the possibility of discovery within them.

6. In the circumstances, the first applicant submitted, there was nothing sinister or untoward about her electing to use the s 1782 procedure to obtain documents instead of applying for discovery orders against the respondents. At the time the s 1782 application was filed, the respondents did not even accept that they had control of the documents sought, much less that they were discoverable.

7. There was no proper basis upon which to conclude that the s 1782 application was an abuse of process.

8. Next, there was no relevant analogy with cases in which subpoenas had been set aside on the basis that they were a substitute for discovery. The respondents ignored the fact that the first applicant, by the s 1782 application, sought orders that a third party produce documents, not the first respondent. There was no authority for the proposition that subpoenas to third parties should generally be set aside on the basis that the documents sought should first be sought through a discovery process from a party to the litigation who may have copies of them. The first applicant submitted that the s 1782 application, being directed to a third party, in no way circumvented the orders made by the Court in respect of the respondents’ obligations to produce documents.

9. The first applicant submitted that the fact that the documents sought were transcripts of depositions was simply irrelevant to the exercise of the Court’s discretion to make the confidentiality orders now sought. Further, assuming the respondents did have the depositions transcripts sought, there was no unfairness in them being provided to the first applicant.

10. The first applicant submitted that the respondents’ submission that it was for her now to prove that the documents sought by the s 1782 application were discoverable should be rejected. The only relevant requirement was that the documents contain “information that relates to a proceeding before the Court”. The first applicant submitted that the Court does not “exercise any control over the manner in which a party obtains the evidence which [the party] needs to support [the party’s] case” and that it is for each party to obtain and present the evidence needed by the party’s “own means, provided always that such means are lawful in the country in which they are used”: South Carolina Insurance Co v Assurantie Maatschappij “De Zeven Provincien” N.V. [1987] 1 AC 24, 41 and 42.

11. As to power, including an implied power, as I have said the first applicant accepted that she must demonstrate that the confidentiality orders were necessary to protect the administration of justice according to the principles set out in Hogan v Australian Crime Commission at [30]-[31]. However she relied on the implied power in the event that the Court held that the production under s 1782 did not fall within s 37AF(1)(b)(ii) or (iii). The requirement of necessity had been met by reason of the confidential nature of the documents now sought to be protected.

12. Confidentiality orders were normally made prior to the production of documents and it would defeat the purposes of s 37AF if the orders could only be made after the confidential information had been obtained by the recipient.

13. The first applicant submitted that the s 1782 application did not interfere with this Court’s processes. It would not interfere with the parties’ preparation of these proceedings for trial. Because the orders sought by the s 1782 application were sought against a stranger to the litigation they did not circumvent or interfere with the discovery regime in place in the proceedings in this Court.

    Consideration

14. In my opinion, although the processes of discovery in this Court provide an important background to the present application, it is not appropriate to address the questions which presently arise by asking whether or not the material the subject of the first applicant’s interlocutory application has been shown presently to be discoverable by the respondents. This seemed to be the issue to which much of the evidence on each side was directed.

15. Instead the central question is whether in the circumstances of this case and on the evidence the Court could and should make orders, which would be interlocutory in nature, for the suppression of information sought to be obtained by the first applicant in her s 1728 proceedings in the US court.

16. Looked at from one perspective, the purpose of the application is to facilitate the first applicant’s application in the US court where that court appears to be concerned that the order of confidentiality made between the parties to those proceedings would not bind the parties in this Court. Of course, the first applicant in this Court is not a party to the substantive proceedings in the US court. It may also be that the US court is concerned to some extent that there may be difficulty enforcing against the party making the s 1728 application, the first applicant in this Court, any confidentiality obligations imposed by the US court. A particular aspect of that last point may be that because the first applicant is a litigant in this Court, this Court may, either by making confidentiality orders or by not making those orders, permit the first applicant a use of the documents which is either less controlled than under the confidentiality order in the US court or is entirely uncontrolled.

17. It may be thought to be a question of timing in the first instance in the sense that, if the US proceedings were not in the picture, circumstances could be imagined where this Court might make a temporary suppression or non-publication order so that, shortly after the making of that order, further evidence would be adduced and a fuller examination of whether or not and on what terms and conditions an order might be made. However, as I understand the present application, what is sought is an order to the same effect as the order of confidentiality in the US court.

18. Is the statutory power to make a suppression order available and should it be exercised? What is known about the information? This can be seen from what is sought in the s 1782 application:

    Authorizing Petitioner to take discovery from the Respondent for use in… the “Australian Action”… by pursuing and serving a subpoena on the Respondent, substantially in the form attached hereto, the copies of the documents listed in the subpoena and on the schedule attached to the subpoena (namely the transcripts of and exhibits to depositions of persons listed in Schedule 1 to the subpoena and to the declaration of Julian Klaus Schimmel, dated July 11, 2013 filed concurrently with this Order to Show Cause.

19. The text of the subpoena, which I have set out above, is relevantly: “The complete transcripts of the depositions of the persons identified in Scheduled 1 hereto, taken in connection with [the multi-district litigation] along with the exhibits to the depositions.”

20. One of the questions is how to construe cl 3 of the Amended Stipulated Protective Order of Confidentiality.

21. It seems to me that the difficulty is in making a court order in the form set out in Annexure A to the first applicant’s interlocutory application where what may be described as a confidentiality agreement would be the subject of the order but where in this Court the respondents do not consent to that regime. Thus there is no agreement. A further difficulty is that the party seeking the order is not the party who has the primary interest in the confidentiality of the documents sought: they are not her confidences with the result that, at least without knowing the contents of the documents, she is not in the usual position in terms of giving specific evidence about them in order to obtain a suppression order.

22. One way of testing the matter, leaving aside abuse of process, would be whether the Court could and would make such an order if the first applicant were to obtain the “Protected Documents” or the information in the “Protected Documents” in the present litigation: for example let it be assumed that this material is in the possession, custody or control of one or both of the respondents in Australia.

23. It is the terms of the order made by the US court which is central to the resolution of the present dispute. Has the requisite necessity been demonstrated? Has the first applicant adduced evidence, for example, of any specific prejudice that would or might flow from disclosure of the material: Hogan v Australian Crime Commission at [35]?

24. It seems to me that the proposed order would apply “in relation to any document designated as a “PROTECTED DOCUMENT” pursuant to the Amended Stipulated Order…”: see proposed order 4. In other words, the proposed order proceeds by reference to what has been designated as “PROTECTED DOCUMENTS” pursuant to the Amended Stipulated Protective Order of Confidentiality. It is therefore necessary to see the extent of the fit or congruence between what is there designated and any exercise of the power to make a suppression order on the ground that the order is necessary to prevent prejudice to the proper administration of justice.

25. For present purposes the significant features of the Amended Stipulated Protective Order of Confidentiality are as follows.

26. First, it proceeds by reference to what the parties to those proceedings have stipulated and agreed. There is no such agreement between the parties in this Court.

27. Secondly, as stated in cl 1, the designation of a document as being a “PROTECTED DOCUMENT” is intended solely to facilitate prompt discovery and the preparation for trial in the US proceedings. A similar point is made in cl 6 which provides that any designation of “PROTECTED DOCUMENT” should not be construed as an admission or an agreement by any party that the designated disclosure constitutes or contains confidential information. The Stipulated Protective Order of Confidentiality “is entered into solely to facilitate a reasonable and prompt disclosure of discovery materials to facilitate preparation and trial of ASR hip implant litigation.”

28. Thirdly, the better construction of cl 3 appears to refer first to information which is protected by rule 26 of the Federal Rules of Civil Procedure as a “trade secret” (as defined in the Uniform Trade Secrets Act), which may or may not be an absolute protection, or information protected by privacy laws in respect of which the only indication of its scope is given by the words "including personal or medical information”. In either case there was no evidence before me as a matter of foreign law about the scope and operation of rule 26 or the Uniform Trade Secrets Act or the US privacy laws.

29. There then seems to be an additional reference to “confidential information” which is said to mean documents containing trade secrets and other information that is of a proprietary, business, financial or technical nature and not readily known or available to competitors, potential competitors, or the public, the value of which arises from its being confidential and the disclosure of which… is believed in good faith by the Supplying Party to have the potential, if disclosed, for causing competitive harm to it or giving a competitive advantage to others. The plaintiffs in those proceedings are permitted to designate materials that contain personal information as a “Protected Document”. At that level of generality the relevant necessity would not be made out.

30. As to “trade secrets” it may be that the relevant law in the United States corresponds to the short statement in Hogan v Australian Crime Commission (2009) 177 FCR 205 at 220-221 in the judgment of Jessup J, with which the High Court expressed its agreement at [38]-[39], that the Australian law protects trade secrets “in well-recognised situations” but, as I have said, there is no evidence before me about the law of the United States in that respect under rule 26 of the Federal Rules of Civil Procedure or the Uniform Trade Secrets Act. In circumstances where this Court must assess whether an order is necessary to prevent prejudice to the proper administration of justice, it is not enough to proceed on the basis that foreign law is presumed to be the same as local law: Walker v W A Pickles Pty Ltd [1980] 2 NSWLR 281 at 284-285 as cited in Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 at [70].

31. Further, although there was much emphasis in submissions on trade secrets it is to be recalled that Mr Schimmel did no more than depose to his belief that the basis of the designation “PROTECTED DOCUMENTS” was on the basis of commercial confidentiality or the protection of trade secrets. That conforms to how I read cl 3.

32. Whether or not trade secrets under US law and at that level of abstraction would found a suppression order may be doubted but it seems to me to be clear that a mere good faith claim to commercial confidentiality would not found such an order. Neither, in my opinion, do the terms of the open offer in a letter dated 13 September 2013 from Herbert Smith Freehills to Maurice Blackburn offering, subject to restrictions on their use, the depositions transcripts of 11 individuals who were at all relevant times employees of one or other of the respondents. That letter refers to a proposed restriction that the transcripts are confidential and are to be treated as subject to the implied undertaking applicable pursuant to Harman v Secretary of State for Home Department [1983] 1 AC 280 and a draft order stipulated that the depositions or information in them must not be used in a way which violated the Amended Stipulated Protective Order of Confidentiality.

33. A related factor is that it seems to me to be unlikely that the entirety of the transcripts of and exhibits to the depositions would constitute trade secrets. That has certainly not been established by evidence. If a suppression order was being sought in relation to information that the moving party had seen or could give cogent evidence about, a consideration of parts of the information in a document could found such an order. I refer specifically to trade secrets because that was the emphasis of the first applicant’s submissions.

34. I accept that the orders sought relate only to those parts of the material for which a bona fide claim for confidentiality as referred to in the Order made in the US proceedings has been made and not challenged by the other side in those US proceedings, but in my view that is not enough to found a statutory suppression order in this Court.

35. Fourthly the agreement between the parties in the US proceedings involves a system of claims which may then be challenged: see cl 7. Once a challenge is made, and the parties cannot thereafter agree, then the supplying party has the burden of making an application to the court for an order directing that the contested document or documents shall remain a “PROTECTED DOCUMENT” under the terms of the Stipulated Protective Order of Confidentiality. Failure of the party claiming that the document is a “PROTECTED DOCUMENT” to move for an order to establish confidentiality within 30 days of receipt of the notice contesting the protected designation operates as a waiver of the confidentiality designation. There is a question as to how the proposed order in this Court would permit a challenge. The point here however is what I have referred to as a lack of fit or congruence between the regime in the US proceedings and the first applicant in this Court establishing the facts to show that the order as proposed is necessary to prevent prejudice to the proper administration of justice. There was no evidence before me that there has been a court determination of a disputed question under the regime in place in the US proceedings.

36. Fifthly, although I shall assume that the parties to the Stipulated Protective Order of Confidentiality are under an obligation to make claims in good faith, it seems to me that of itself does not establish in this Court satisfactory evidence of apprehended particular or specific harm or damage as referred to in Hogan v Australian Crime Commission at [41].

37. I note, but this in my view confirms the difficulty rather than solves it, that Mr Schimmel in [32] of his first affidavit says that he “caused to be drafted a proposed confidentiality regime mirroring the central aspects of the US Protective Order in a form appropriate to be made in the representative proceedings in this Court.” Mr Schimmel also states his belief at [42] that to the extent that any of the documents sought by the first applicant in the s 1782 application had been designated as “Protected Documents” this has been done either by the first respondent or by another entity in the Johnson & Johnson corporate group that is a defendant to the multi-district litigation on the purported basis of commercial confidentiality or the protection of trade secrets. Accordingly, Mr Schimmel says at [44] that it is his understanding that the making of the proposed confidentiality orders by this Court would be for the benefit of the first respondent and/or entities that are, like the first respondent to this proceeding, related to Johnson & Johnson Inc, including DePuy Orthopaedics, Inc. In my opinion this does not amount to evidence on which I would act to make the orders sought by the first applicant.

38. In my view it does not assist that, as deposed to by Mr Schimmel at [45] numerous documents that bear the marking “Protected Documents” had been discovered by the respondents to the first applicant in the representative proceedings in this Court. That tends to confirm that the problem of fit or congruence to which I have referred and gives strong support to the conclusion that the order sought by the first applicant in this interlocutory application should not be made.

1. This leads me to the point that what is sought by the subpoena may or may not be “trade secrets” in whole or in part and may or may not be information protected by privacy laws, including personal or medical information, in whole or in part. There is no evidence before me about that. This is another example of the lack of fit or congruence between the operation of the consent regime under the Amended Stipulated Protective Order of Confidentiality and the making of an order under s 37AG(1)(a) at this point.

2. I do not accept the submission at [25] of the first applicant’s submissions in reply that the requirement of necessity has been met by reason of the confidential nature of the documents now sought to be protected. In my opinion, the mere fact that a party has contended that certain documents are “PROTECTED DOCUMENTS” or that they are confidential does not establish that a suppression order is necessary to prevent prejudice to the proper administration of justice within s 37AG(1)(a). It is to be recalled that the language of cl 3 is that the disclosure of the information “… is believed in good faith by the Supplying Party to have the potential, if disclosed, for causing competitive harm to it or giving a competitive advantage to others.” Such a claim does not establish that an order is necessary or that an order is necessary to prevent prejudice to the proper administration of justice.

3. The first applicant referred to Ritz Hotel v Charles of the Ritz (1988) 15 NSWLR 158 at 173C-D as to the drawing of an inference, in the present case from the claim for confidentiality by the respondents. However, it is not that I would not draw an inference that in the ordinary course of human affairs people do not in good faith claim to be confidential material that they do not consider to be confidential but that a mere claim, even in good faith, that a document is confidential is not sufficient to found an order under s 37AG(1)(a).

4. Nothing I have said means or should be taken to mean that with appropriate evidence and in appropriate circumstances trade secrets or personal records or commercial confidential information could not be or would not be the subject of an order under s 37AG(1)(a).

5. In light of my conclusions I have not found it necessary to address the respondents’ other main ground of opposition which is that the first applicant’s application is an abuse of process, in part because the application was not being made for the purposes contemplated by s 37AG but instead to try and obtain an order under s 1782 to obtain the documents and in part because of the managed discovery process in this Court where, it was submitted, the first applicant was attempting to achieve discovery through an application in this Court for a suppression order. It is also unnecessary for me to consider whether the proper construction of s 37AF is that it has no anticipatory operation, that is, so that the words “obtained” and “produced” did not merely apply to the past, as contended for by the respondents, but should be understood as including “sought to be obtained” or “sought to be produced” as contended for by the first applicant.

   Conclusion

6. For these reasons I dismiss the first applicant’s interlocutory order of 15 October 2013, with costs.

I certify that the preceding one hundred (100) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Robertson.

Associate:

Dated:       5 December 2013