Mrs Justice Cockerill:
Background
1.
This is the hearing of the application of Mr Mudan, Mrs Mudan, Mudan
Pharma Ltd and Rose Healthcare Ltd (“the Mudan Entities”) to set aside the
order of Master Yoxall dated 3 August 2017 (“the Order”) made under the
Evidence (Proceedings in Other Jurisdictions) Act 1975 (“the 1975 Act”)
pursuant to a letter of request (“the Letter of Request”) from the United
States District Court Central District of California (“the US Court”).
2.
Allergan is an international pharmaceutical company which trades all
over the world. It is responsible for well-known medical products, including
BOTOX® (a prescription-only pharmaceutical whose use for cosmetic purposes is
well known, but which is also used for treatment of serious medical
conditions). In November 2016 Allergan brought a claim in the US
Court against Amazon Medica, a website which it is not suggested has any
connection to the global internet retailer, and to which I shall refer as “AM”.
3.
Allergan claims that AM is responsible for unlawfully importing and
marketing Allergan-branded products to purchasers in the US.
The evidence indicates that AM advertised itself as “Great
Britain’s leading pharmaceutical and medical device facilitator” and it
claimed that it was selling Allergan products at lower prices than Allergan
itself. Thus on the FAQ page: “How can Amazon Medica offer authentic
Allergan Botox at a lower price than Allergan itself? … Amazon Medica is Great
Britain’s #1 Parallel Importer and their affiliated pharmacies ... purchase
directly from Allergan’s UK licensed wholesalers at wholesale pricing. These
savings are passed on …”.
4.
The claim brought by Allergan against AM is for infringing intellectual
property rights, false advertising, unfair competition, and intentional
interference with prospective economic advantage. The relief sought is a
permanent injunction to prevent AM and persons associated with that website
from continuing the unlawful marketing and importation of Allergan’s products.
Allergan also reserves the right to claim damages, although it has not done so
yet, has no current plans to do so and concedes that this is not its primary
aim.
5.
Allergan says that the imports are potentially a danger to patient
safety, because the imported products do not carry the labelling required by
the US Food and Drug Administration (“FDA”), may be shipped under inappropriate
conditions (e.g. without the required refrigeration), and in some instances are
not approved for sale in the US at all. Allergan’s claim in the US
Court is, it says, therefore to protect its legitimate commercial interests,
its reputation, and patient safety.
6.
No defendant in the US action has acknowledged service or otherwise
responded to the claim. The AM website ceased trading in February 2017.
7.
Mr Mudan is a pharmacist and owner, with his wife, of the Mudan Entities.
He admits that he has been responsible for supplying Allergan-branded products
on behalf of AM to purchasers in the US, through his UK-based companies. Mr
Mudan has not revealed the full value of these sales. The Claimant,
extrapolating from the value of two test purchases it made ("the Test
Purchases") and the number of transactions Mr Mudan has indicated he was
involved in, suggests that they may well run into hundreds of thousands of
pounds.
8.
Those Test Purchases involved the purchase of certain products and
showed not just the price of sale but also the time lag between sale and
delivery, the packaging of the delivery, and the packaging and labelling of the
products including lot numbers as well as invoices from the Mudan Entities.
9.
In November 2016, following the Test Purchases, Allergan wrote to Mr
Mudan in, it is fair to say, somewhat aggressive terms - suggesting that his
actions might be illegal and imperil his registration status as a pharmacist.
He responded in May 2017 – the letter having apparently not reached him before
this time. Discussions proceeded for some time but no agreement was reached as
to the provision by Mr Mudan and the Mudan Entities of evidence to Allergan.
10.
On 14 June 2017, following an application made on paper, the judge in California issued the Letter of Request which is the basis for the dispute before me today.
An application to this court for an order was made ex parte in early July and
resubmitted in slightly different terms later in July. This led to the Order
which is the subject of challenge. This ordered the provision of oral evidence
by Mr and Mrs Mudan and provision of documents by the Mudan Entities.
11.
Most recently, on 8 February 2018, the judge in California ordered
Allergan to show cause before 21 February 2018 as to why the case should not be
dismissed for failure to prosecute, or Allergan should take default judgment.
This order stated:
“Absent a showing of good cause, an action must be dismissed
without prejudice if the summons and complaint are not served on a defendant
within 90 days after the complaint is filed. Generally, defendant must answer
the complaint within 21 days after service (60 days if the defendant is the United States.)
In the present case, it appears that one or more of these
time periods has not been met. Accordingly, the court, on its own motion,
orders plaintiff(s) to show cause in writing on or before February 21, 2018 why
this action should not be dismissed for lack of prosecution. As an alternative
to a written response by plaintiff(s), the Court will consider the filing of
one of the following, as an appropriate response to this Order: To Show Cause,
on or before the above date, as evidence that the matter is being prosecuted
diligently … Plaintiff's application for entry of default pursuant to Rule 55a
of the Federal Rules of Civil Procedure…
No oral argument of this matter will be heard unless ordered
by the Court. The Order will stand submitted upon the filing of a responsive
pleading or motion on or before the date upon which a response by plaintiff(s)
is due. This action will be dismissed if the above mentioned documents are not
filed by the date indicated above.”
12.
The Letter of Request and the Order seek both oral and documentary
evidence. As explained further below some changes have been made to the
categories set out in the original Letter of Request when drafting an Order for
this Court.
13.
In terms of oral evidence, the changes are fairly small, and the
evidence sought, as set out in Schedule B to the Order is as follows:
“(a) Communications
with the Amazon Medica Entities advertising or selling Allergan-branded
products within the United States;
(b) Agreements with the Amazon Medica Entities;
(c) The
identities of persons associated with or operating the Amazon Medica Entities;
(d) The methods of operation of the Amazon Medica
Entities;
(e) The sourcing and purchasing of Allergan-branded products;
(f) The
sale and shipment of Allergan-branded products into the United
States, including the identification of all United States customers;
(g) Methods
and means used to pay suppliers of Allergan-branded products; and
(h) Methods
and means of payment used by the customers of the Mudan Entities, related to
the sales of Allergan-branded products into the United States, including sales
arranged or facilitated by the Amazon Medica Entities.”
14.
The Order as made by Master Yoxall also requires Mr Mudan and his
companies to provide the documents specified in Schedule A. The draft Order
which I am asked to make does likewise, but as amended by deletions to reflect
information provided by Mr Mudan as to documents not within the Mudan Entities’
possession custody or power. Schedule A is itself a tailored version of
Attachment 1 to the Letter of Request. It proceeds under the same broad
headings, but the individual paragraphs have been considerably altered and
added to in order to make the requests more specific.
15.
It is common ground that (in broad terms) these documents exist and are
in the possession of the Mudan Entities. Mr Mudan has produced, annexed to his witness
statement, a schedule which acknowledges their existence, but makes various
points as to the burden which would be placed on him in producing these
documents. I will revert to these points under the topic of “Oppression” below.
16.
In summary, Allergan says that it is clear that Mr Mudan is in a
position to provide relevant oral evidence that will assist Allergan in proving
key allegations in its US claim. Allergan therefore maintains its position as
to his examination on the topics set out in Schedule B to the Order. It also
maintains its position as to the documents in Schedule A.
17.
As for Mrs Mudan, it is now common ground that she should not be
required to provide evidence, because Mr Mudan and his solicitor have each
explained that she had nothing to do with the running of Mr Mudan’s
pharmaceutical business and that explanation has been accepted.
18.
For their part, Mr Mudan and the Mudan Entities seek to set aside the
Order in its entirety. The points raised may be summarised thus:
i)
Jurisdiction (general):
a)
Relevance: the relevance of the oral evidence and documents to the
substantive issues in Allergan’s US claim.
b)
Evidence for trial: the Mudan Entities’ assertion that “there would
be no trial in any event” in the US proceedings.
ii)
Jurisdiction (documents): whether the list of documents in Schedule A to
the Order is sufficiently specific to comply with the challenging requirements
of section 2(4) of the 1975 Act.
iii)
Discretion (amendment of documentary request): the Mudan Entities
assert that Schedule A to the Order has been impermissibly re-written.
iv)
Other discretionary issues:
a)
Oppression: the Mudan Entities assert that the Order is oppressive.
b)
Self-incrimination: the self-incrimination issues raised by the Mudan
Entities.
c)
Data protection: the Mudan Entities assert that the documents listed in
Schedule A to the Order cannot be provided because of data protection concerns.
d)
Full and frank disclosure: the Mudan Entities suggest failures in this
respect would be relevant to the exercise of discretion.
Jurisdiction
19.
The Mudan Entities make several complaints that relate to the relevance
of the evidence sought and the prescribed scope of the Court’s power to assist
foreign courts under the 1975 Act. In particular, in their application notice
it is asserted that:
i)
The list of documents in Schedule A “is investigatory in nature, for
the purposes of pre-trial disclosure and not solely for evidence at trial”.
ii)
The Court “should not have been satisfied” that Mr Mudan
“could give any relevant evidence…. which falls within the jurisdiction of the
English Courts under the [1975 Act]”.
iii)
The list of topics for the oral examination of Mr Mudan in Schedule B to
the Order is “too wide and open-ended”.
20.
In support of these submissions the Mudan Entities draw my attention to
the jurisdiction under the 1975 Act. In particular they point me to the central
jurisdictional sections of the Act which state:
“…the High Court … shall … have power, …by order to make such
provision for obtaining evidence in the part of the United Kingdom in which it
exercises jurisdiction as may appear to the court to be appropriate for the
purpose of giving effect to the request in pursuance of which the application
is made; and any such order may require a person specified therein to take such
steps as the court may consider appropriate for that purpose….
An order under this section shall not require any particular
steps to be taken unless they are steps which can be
required to be taken by way of obtaining evidence for the purposes of civil
proceedings in the court making the order (whether or not proceedings of
the same description as those to which the application for the order relates); ….”
21.
They remind me that it is well established, inter alia by the authority
of the House of Lords in Rio Tinto Zinc Corporation v Westinghouse Electric
Corporation [1978] AC 547 that orders will not be made under this
jurisdiction for pre-trial investigatory discovery and submit that the case
stands as authority for the proposition that evidence may be obtained only for the
purpose of proving (or disproving) a case at trial.
22.
They say that the application falls foul of this on a number of heads.
First they submit that it is not evidence for trial in the sense that there
will be no trial in this action. Relying on Westinghouse and Re
International Power Industries NV [1985] BCLC 128 they argue that where
there are no proceedings which will result in a trial or proof of disputed
facts or where what will take place is non-adversarial the Act is inapplicable.
23.
In this connection, considerable stress was placed on the fact that the
only pleaded claims are for an injunction and a declaration.
24.
They also pray in aid the fact that Allergan is, as a matter of US
procedural law, entitled to judgment in default and submit therefore this
cannot be evidence for trial. In this connection they submit that the
proceedings are in fact moribund and rely heavily on the recent Order of the
California Court. Ms Rosen Peacocke for the Mudan Entities submitted that this
was clearly a considered response by the US Court, that it indicates that the
time for any purging of default by the Defendants is past and that the judge
has on the true interpretation of this document ruled that this case will never
require oral evidence. She submitted that this document indicates clearly that
there will never be a trial in that the judge has stated that no oral hearing
will be held. Thus, it is said, the judge has indicated that judgment in
default will be given on the pleadings and that no further evidence is needed.
25.
This, they say, is also consistent with the evidence as to US Law more
generally in relation to the question of default judgment. It was submitted
that the authorities show that the US Courts will grant a permanent injunction
on the pleadings only where no appearance has been entered by the Defendant. I
was referred first to Amini Innovation Corp v KTY Int’l Mktg 768 F.
Supp. 2d 1049 where the Court stated: “the Court must accept the
well-pleaded allegations in the Complaint as true for the purposes of a default
judgment”. “Well-pleaded”, it appears, means a pleading supported by
sufficient facts that if the facts were taken as true the party would be
entitled to the relief sought. That is in contradistinction to a pleading of
legal conclusions or formulaic recitation of the elements of a cause of action:
Bell Atlantic Corp. v Twombley 550 US 554, 570 (2007).
26.
On this basis it is submitted for the Mudan Entities that even if
(contrary to the court’s order) a hearing might be required, since there is no
suggestion the complaint in the California Proceedings is not “well-pleaded”, it
would only be as to whether the Complaint in the California Proceedings is
sufficient and the court would very likely make its decision only on the
submitted papers, as was done on Allergan’s expedited discovery motion.
27.
I was also referred to the case of Juicy Couture Inc v Il Keun Oh
2010 WL 11523637 in which the same judge who is docketed to the California
Proceedings granted a permanent injunction by default in a similar case. It was
submitted that while more might be required in a case where damages were sought
in the Complaint, this is not a case where damages are pleaded – or are
intimated to be included before default judgment is applied for.
28.
The Mudan Entities second main submission is that this request, when
analysed is not within the ambit of evidence for trial; they say it is in
reality a fishing expedition, indeed one which is redolent of Waller LJ’s
famous dictum in Refco Capital Markets v Credit Suisse (First Boston) [2001] EWCA Civ 1733, [2002] CLC 301:
“Once again time and money is being spent in the English
courts over letters rogatory requesting the English court to order the
production of documents and oral deposition from third parties to litigation in
the USA. That time and money would be unnecessary, if those seeking the request
from the US court appreciated the differences between the attitude of the US
courts to the making of ‘discovery’ orders against non-parties, and the
attitude of the English court to the making of such orders. The UK,
when becoming parties to the Hague convention concluded in 1970, registered a
reservation pursuant to art. 23 which became enshrined in the Evidence
(Proceedings in Other Jurisdictions) Act 1975 making it clear that discovery against
non-parties was something the English court would not provide because it simply
was not part of its procedure. It is only that Act which gives the English
court the jurisdiction to make orders to assist foreign courts. A number of
authorities of the House of Lords since the coming into force of that Act have
emphasized the position. But still much time is taken up in our courts trying
to give effect to letters of request, problems in relation to which could have
been avoided if proper steps had been taken to bring to the attention of the
foreign court the constraints under which the English court operates.”
29.
In this respect they point to a number of features. They highlight the
evidence given by Ms Simpson for Allergan in support of the Order which suggests
that the evidence is needed to quantify loss – when in fact there is no claim
for loss and quantification cannot be relevant to the injunction claim. They
point to other parts of the evidence where Ms Simpson frankly explains that the
evidence is sought to enable Allergan to identify other individuals as
defendants to the claim.
30.
They point also to the width of the requests – in particular the
requests for oral evidence which are unconstrained by any time period and in
some cases contain no link to AM at all, on their face seeking to ascertain
evidence of all purchases by the Mudan Entities of Allergan products, all
shipments of Allergan products into the US, and details of payment in both
directions for Allergan products.
31.
The Mudan Entities point to the fact that there is no statement in the
Letter of Request or evidence as to why the evidence sought is needed and
contend that the evidence suggests that Allergan actually have (as well as the
evidence from the Test Purchases) considerable evidential material the
substance of which has not been disclosed to this Court; for example the
evidence obtained via Letters of Request or subpoenas addressed to FedEx,
American Express and Parcelforce. This they say must be relevant to the Court’s
exercise of discretion.
32.
The Mudan Entities therefore submit that overall the evidence
demonstrates that there is no real interest on the part of Allergan in amassing
evidence against AM for proof of a case at trial, but rather what is sought is
information to pressure Allergan suppliers and customers and control Allergan’s
products. This they say is next door to clear from the fact that identities of
suppliers and customers are sought when there can be no need for this
information for trial.
33.
Allergan submits that these complaints are without merit and that the US
Court and Master Yoxall were both rightly persuaded that the evidence sought
by Allergan is relevant and will assist Allergan in proving key allegations in
its US claim.
34.
Allergan accepts that Section 2(3) of the 1975 Act in the words of
Andrew Smith J in Smith v Phillip Morris Companies [2006] EWHC 916 (QB)
at [30(ii)]:
“restricts what orders the court may make to (so far as is
relevant) steps that can be required to be taken by way of obtaining evidence
for the purposes of civil proceedings in the English Court, and so ‘prohibits
the making of an order for the examination of a witness not party to the action
for the purpose of seeking information which, though inadmissible at trial,
appears to be reasonably calculated to lead to the discovery of admissible
evidence’”.
35.
However it says it does not fall foul of this. It is looking for
information to establish admissible allegations of fact. It says that so far as
oral evidence goes, there are sufficient grounds for believing that Mr Mudan
has relevant evidence to give on topics relevant to issues in Allergan’s claim,
and he cannot object to the order for oral examination on the grounds that it
is a “fishing expedition”. It points me to the judgment of the Court of Appeal
in First American Corp v Sheikh Zayed Al-Nahyan [1999] 1 WLR 1154 at
1163H-1164A and 1164F-G:
“if there is good reason to believe that the intended witness
has knowledge of matters in issue at the trial so as to be likely to be able to
give evidence relevant to those issues, I do not understand how an application
to have the intended witness orally examined can be described as ‘fishing.’ It
cannot be necessary that it be known in advance what answers to the questions
the witness can give. Nor can it be necessary that the answers will be
determinative of one or other of the issues in the action… if there is
sufficient ground for believing that an intended witness may have relevant
evidence to give on topics which are relevant to the issues in the action, a letter
of request seeking an order for the oral examination of the witness on those
topics cannot be denied on the ground of fishing.”
36.
It submits that I should take the indication of relevance within the Letter
of Request very seriously. It reminds me that it is well established so far as
relevance is concerned, weight should be given to US Court’s statements in the
Letter of Request that the evidence sought is relevant to the
substantive issues in Allergan’s claim. It cites CH
(Ireland) Inc v Credit Suisse Canada [2004] EWHC 626 at [14]:
“in the ordinary way and in the absence of evidence to the
contrary the English court should be prepared to accept the statement of the
requesting court that such is the purpose for which it is required… if the
letter of request states that a particular person is a necessary witness then
the English court should not itself embark on an investigation as to whether
the requesting court is correct for the purpose of determining in advance
whether the evidence is relevant and admissible”
37.
While it accepts that I am not bound by such statements and that the
Court is nonetheless entitled to satisfy itself that these statements in the
Letter of Request are well founded it says that I have a good steer, to which I
should pay mind, in the Letter of Request which records that Allergan had “advised
the [US Court] that the documents and information sought are relevant and
necessary for the due determination of matters in dispute between Plaintiffs
and Defendant Amazon Medica”.
38.
The Letter of Request also states that “Allergan plans to use the
requested evidence in the United States District Court to permanently enjoin
Amazon Medica’s illegal operations, as well as third-party support of such
illegal operations” and that the Mudan Entities are “in current
possession of some of the best evidence to prove the nature, purpose,
and extent of Amazon Medica’s illegal activity as well as its physical location
and the identities of those associated with Amazon Medica” and that they
are “in possession of highly relevant evidence, which Allergan intends to
present to the United States District Court”.
39.
Allergan says that if I am minded to go beyond the statement in the Letter
of Request in any event, the requested evidence is plainly for the purpose of
proving allegations of fact relevant to Allergan’s substantive claim. In
particular, it was argued in the skeleton and orally before me that the
evidence is relevant to a number of allegations of fact, in particular that:
i)
There has been targeting of medical practitioners and placement of
products for sale within the California Central District. It is said that the
documents, and Mr Mudan’s oral evidence, will demonstrate location of
purchases.
ii)
AM has set up a scheme to source Allergan-branded pharmaceutical
products from the UK and to market those products to US medical practitioners
on the false basis that they can be lawfully distributed and administered to
patients in the US. It is said that Mr Mudan will be able to provide oral evidence
on the existence of the scheme and in particular as to his agreement with AM
and its operation, supported by the documents held by Mr Mudan’s companies, in
particular orders, invoices and receipts, and certain shipping records.
iii)
The imported Allergan-branded products did not carry FDA labelling and
that BOTOX® packaging in the UK does not include the FDA’s key “black box”
warning. It is said that Mr Mudan will be able to provide evidence as to
whether the products he supplied carried FDA labelling (or, if not, what
labelling they would have carried).
iv)
The Allergan-branded products marketed by AM included specific products,
some of which were not approved for sale and use in the US.
It is said that Mr Mudan will be able to provide evidence as to precisely which
Allergan-branded products he supplied.
v)
The conditions in which Allergan-branded products were shipped to US
purchasers were not necessarily appropriate and claims that products are
shipped at the proper temperature cannot be trusted. It is said that Mr Mudan
will be able to provide evidence as to the conditions and time period in which
he shipped Allergan-branded products to the US.
vi)
AM does not provide return packaging or other means for customers to
return medicinal products. Mr Mudan will be able to explain whether this is
true, at least in relation to the products that he supplied.
vii)
AM purports to have office locations that are non-existent, that it has
taken steps to mask its digital/IP location, and that it is believed that the
individuals behind AM include David Wagenleiter. It is said that Mr Mudan will
be in a position to state whether Mr Wagenleiter is behind AM and to identify
any further individuals behind that business and that this will also be evident
from the electronic communications and business telephone records sought by
Allergan.
viii)
It has suffered harm to its reputation, business, and goodwill. It is
said that many of the documents sought are relevant to these two points:
a)
Mr Mudan accepts that he is in possession of orders, invoices, and
receipts in respect of “several hundred orders” for Allergan-branded
products.
b)
Mr Mudan accepts that he has access to bank statements and to
credit/debit card records detailing payments to/from AM or in respect of sales
of Allergan-branded products on behalf of AM.
c)
Mr Mudan has invoices from the suppliers to the Mudan Entities which, in
combination with the other documents, will enable Allergan to prove that
Allergan-branded products have been purchased by the Mudan Entities at prices
that are lower than the prices that would have been paid by US
purchasers for products approved for use in the US market.
40.
Finally, it is said that this detailed evidence as to the nature and
scale of AM’s operation is relevant to the appropriateness of granting a
permanent injunction, which is a discretionary remedy.
41.
Allergan submits in this connection that the English Court should not
micro-manage the topics identified by the US Court in the Letter of Request. It
draws my attention to the dictum of Sir Richard Scott V-C in Zayed at
1165B-D, citing In re Asbestos Insurance Coverage Cases [1985] 1 WLR 331
at 339:
“The question as to what evidence would and what evidence
would not be relevant to an issue in the foreign action is primarily a matter
for the foreign court… an English court must look at the issue of the relevance
of the requested testimony, if it is raised, in broad terms, leaving to the
foreign court, in all but the clearest cases, the decision as to whether
particular answers, or answers on particular topics, would constitute relevant
admissible evidence.”.
42.
These authorities, it says, establish that if there is a doubt, the
benefit of that doubt should be given to the requesting party. In any event, it
says that there are safeguards against excessive width in the Order which expressly
prohibit any impermissible fishing expedition, that further safeguards can if
necessary be inserted and the Court can rely on the Examiner to ensure that
bounds are not overstepped.
43.
So far as the “no trial in any event” argument is concerned Allergan says
the Mudan Entities’ argument is misconceived – there is no magic in the
question of whether there will in fact be a trial and this Court cannot be
expected to crystal gaze. The key issue is whether the Letter of Request and
the order of the English Court seek relevant evidence; here the evidence sought
is relevant to the issues in Allergan’s substantive claim and would be
admissible at trial in respect of those issues.
44.
Allergan says this is a very different sort of case to those involving
certain types of proceedings which by their very nature are investigatory and
will never involve a trial (such as those in Re International Power
Industries, which dealt with the powers of a US liquidator); Allergan’s
claim is an ordinary civil claim brought by way of a Complaint (i.e. a
Particulars of Claim) and seeking final relief of the type that is typically
granted following a trial.
45.
It says that the text of the Act supports this approach. Section 1(b) of
the 1975 Act permits the English Court to order the production of evidence in
support of civil proceedings “whose institution before that [foreign] court
is contemplated”. If civil proceedings are merely “contemplated”, it
cannot be known whether a trial is bound to take place. This indicates that
section 2(3) of the Act requires the Court to ask itself whether the evidence
would be admissible at trial if a trial were to take place. The
applicant does not have to surmount the further hurdle of persuading the Court
that a trial is bound to take place. Otherwise, potential witnesses could seek
to resist orders made under the Act by arguing that a settlement of the claim
was probable or that the claim was so weak (or so strong) as to be suitable for
summary judgment.
46.
It also argues that the 1975 Act expressly contemplates that the
evidence obtained might be deployed at hearings that are not a trial. Section
1(b) requires the court to be “satisfied” that the evidence “is to be
obtained for the purposes of civil proceedings”. These are defined in
section 9(1) as “proceedings in any civil or commercial matter”. This,
it is well established, is a wide term, and not restricted to the actual trial
or hearing of a civil action; thus a party might properly seek to deploy
evidence obtained via a letter of request in support of an application for
summary judgment.
47.
It also submits that it is likely in the present case that the evidence
obtained from the Mudan Entities will be deployed at a substantive hearing. A
trial remains possible (if new defendants are added and respond). In this
regard, it submits that the Mudan Entities’ position is circular: by refusing
to provide evidence that is part of making out a case against the wrongdoers
they are seeking to perpetuate a situation in which Allergan is struggling to
bring the individual wrongdoers before the court.
48.
But in any event, Allergan says, there will at the least be a hearing
before the US Court at which Allergan deploys the evidence from the Mudan
Entities in support of an application for final injunctive relief.
49.
In this connection Allergan takes issue with the Mudan Entities’ case as
to the future prognosis for the California Proceedings. Allergan says that the
recent Order cannot sensibly be read as was suggested; the judge’s
communication is simply an administrative process prompted by lapse of time,
and that the notation as to oral hearing pertains only to the current step
(showing cause or applying for default judgment). Allergan says that the grant
of a permanent injunction is not a mere formality that can be obtained by filing
an administrative request for default judgment; the remedy is a discretionary
one and the US Court will need to be satisfied that relief is appropriate in
all the circumstances.
50.
On the authorities Allergan says that they do not support the Mudan Entities’
case. Amini, it says, demonstrates that further materials may well be
needed and relied on. It points to a distinction between the test for default
judgment per se and the test for the granting of injunctive relief which
requires the proof of irreparable harm, which can be supported by
“substantiated evidence”. They also point to the fact that the case
specifically states that damages must even at the default stage be “proved up”
– a process which may include witness testimony and other admissible evidence. In
this regard, the position is not dissimilar to the position under English
procedure, where proof of a claim for relief will be required.
51.
So far as the Juicy Couture case is concerned it says that this
supports this analysis; that was a case where liability was admitted, but
evidence was still required to prove damage. Allergan also directs my attention
to the recent case of Wooten v McDonald Transit Associates Incorporated
788 F.3d 490 (5th Cir. 2015) which held that it was permissible for a court
hearing a default judgment application to consider evidence when considering
whether to exercise its discretion to grant default judgment.
52.
Allergan says that the oral and documentary evidence from the Mudan Entities
will therefore be placed before the US Court to prove that there is a
substantive basis for obtaining the injunctive relief sought, that Allergan has
been suffering significant damage due to the actions of AM, and that there will
be significant harm in the absence of injunctive relief. The evidence may also
inform the terms of the order that the US Court is willing to grant.
Conclusions
53.
The first step in considering a contentious letter of request involves
keeping an eye on the underpinning jurisdiction. That is a jurisdiction which
is limited to “steps which can be required to be taken by way of obtaining
evidence for the purposes of civil proceedings” in this Court. In other
words, when talking of compelling oral evidence the comparator is with when a
witness summons would be available in proceedings in the English Court.
54.
It is that fundamental building block on which the correct approach, as
set out in the authorities is based. This emphasises repeatedly the centrality
of relevance for trial. Thus what may be termed the modern touchstone: the two
stage test in Zayed at 1165D-E which has been repeatedly invoked in
subsequent authorities:
"an English court … should, in my opinion, ask first
whether the intended witnesses can reasonably be expected to have relevant
evidence to give on the topics mentioned in the …schedule of requested
testimony, and second whether the intention underlying the formulation of those
topics is an intention to obtain evidence for use at the trial or is some other
investigatory, and therefore impermissible intention."
55.
Therefore in the final analysis the questions of relevance and intention
to use at trial are the key points. In this connection I should note that in
some respects Allergan therefore cast their net too wide when they speak about
admissibility. Admissibility may well be considered in the context of a witness
summons; but it is rarely of relevance in the context of a letter of request.
Defining the permissible ambit of enquiry by reference to admissibility would
lead to enquiries far beyond what is relevant and useful at trial; and policing
by reference to admissibility in the context of letters of request is dangerous
when foreign courts have different views as to what evidence is admissible.
56.
Turning then to the question of relevance, here it is true that the court
will not be too astute to go behind the indications in a letter of request as
to relevance for trial (Lord Keith in RTZ at p. 654F-G). However the
court is by no means prevented from looking at what is said and giving
appropriate weight to that, and the Court will have regard to the wording of
the letter of request in each case – and where that information is available as
to the circumstances in which the letter was obtained – in order to evaluate
how much weight should be given to such wordings as are often relied upon by
parties seeking to uphold a letter of request. Thus in RTZ itself the
court noted not just the wording used by the US Court, but also the fact that
it was the result of advice from English Leading Counsel and the process by
which the letter of request had been obtained.
57.
So it must be borne in mind that, just like many applicants for letters
of request, US Courts do not necessarily comprehend - unless it is explained to
them - the basis upon which this jurisdiction operates and in particular its
limitations. So when a US Court has heard argument on the issuance of a letter
of request, and has had the English Court's approach explained to it, and sets
that out in the letter of request and says something along the lines of: “I
understand the basis on which the English Court operates may be rather more
restrictive than that with which I am familiar, but even so I can say that the
evidence sought is relevant to issues for trial” (as was ultimately done regarding
the oral evidence in RTZ) it will be almost unimaginable for the court
to look behind that statement.
58.
However a letter of request not issued on that basis will be more open
to scrutiny where the terms of the letter suggest that the intention behind it
is not to obtain evidence for trial. It is not the same thing at all (as noted
in CH (Ireland) Inc v Credit Suisse Canada [2004] EWHC 626) when a court
issues a letter of request without the defendant being heard, or when the Court
itself says nothing about relevance but simply records the submission of the
applicant.
59.
This distinction is relevant here. This is exactly a case of a letter of
request being issued following an unopposed paper application, in exactly the
form sought by the applicant. That application did not flag up the basis on
which this court approaches requests for evidence from third parties. It is
also a case of the letter simply recording the applicant’s contentions as to
relevance. I do not therefore consider myself constrained from looking at the
substance of what is sought.
60.
Nor do I think that there is a short cut through this via the “no trial
in this case” submission. On this I am to some extent with Allergan. It is
plainly right that the existence of an ultimate trial is not key, and that this
court cannot be expected to decide the question of relevance by reference to
such an uncertain question. Similarly I accept the submission that this case,
which is on its face a normal civil suit, would not be analogous to the kinds
of the situations contemplated in Re International Power Industries. I
do not accept the submission advanced for the Mudan Entities that that
authority stands for the proposition that the Act is inapplicable to all cases
where the process is non-adversarial; that seems to me to mischaracterise the
position in that case. There a compromise terminated the adversarial part of
proceedings so what remained was an issue about whether bankruptcy proceedings
of an investigatory nature were covered by the Act (which Woolf J held they
were not).
61.
This case then could not be analogous to the situation envisaged in Re
International Power unless it were established to be the case that no
consideration of the merits could ever eventuate (for example if the judge had
ruled that the matter would proceed on the documents submitted to date). I am
quite clear that that is not the situation and that the judge has to date done
no more than indicate that there are three options: apply for default judgment,
give a good reason why you are not applying for default judgment, or see your
case struck out.
62.
It cannot therefore be said that the question of relevance cannot arise.
However the nature of the case as it currently stands and the likely future
course of the litigation is in my judgment relevant background to the
assessment of the question of relevance.
63.
I do not say that it is inevitable that a letter of request issued at
this stage cannot meet the test – that would, as Allergan submitted, be to fly
in the face of the wording of the Act which contemplates the making of an Order
as early as a time when proceedings are contemplated. However the timeline certainly
gives pause for thought and requires this court to ask the questions as to
relevance and intention. Lord Fraser said in RTZ (at [1978] AC 547,
643G): “the mere fact that letters rogatory have been issued at the
pre-trial discovery stage does not mean that they are not seeking for evidence
in the sense of section 1 of the Act of 1975 but it does, so to speak, put one
on one's guard”. See too Buxton LJ in Golden Eagle Refinery v Associated
International Insurance [1998] EWCA Civ 293: “We should proceed with
care before assuming that an application made at the pre-trial discovery stage
that certainly does not in terms confine itself to trial testimony is so
confined.”
64.
Normally in looking at relevance this Court is somewhat further along
the timeline. Although the discovery stage of US litigation is, as the
authorities indicate, seen as an early stage for witness evidence by English
standards, one is there looking at a case which is considerably further
developed than the one in this case. In particular what there will be is a
pleading from each side, which will define the issues - properly so called - in
the sense of the contentious factual matters relevant to establishing the
constituent parts of the cause of action or defence.
65.
Here we are looking at a stage even before the pre-trial discovery
stage. There are as yet no defined issues; because there is no pleading from
the Defendant. Allergan says all sorts of things in its Complaint, but there is
no comeback on any of them. Some of those allegations are ones which would need
to be established at trial to succeed; some are immaterial for the purposes of
relief. This Letter of Request appears to have been issued as part of a preliminary
pre-pleading discovery round, a major focus of which is to establish against
whom claims can be brought. It is plain on the evidence – and is not in issue -
that one of the purposes of this Letter of Request is to glean material for
this purpose. Thus it is clear that a part of the purpose of this Letter of Request
is investigatory and therefore impermissible.
66.
The question is whether, taken as a whole, that is its nature - making
it outwith this Court’s jurisdiction; or whether it can fairly be regarded as a
“dual purpose” letter of request, the legitimate portion of which can be saved
by appropriate pruning and safeguards.
67.
Looking first at the Letter of Request itself, particularly as regards
oral evidence, which faces the lowest threshold: the starting point is the list
of requested testimony. There is no doubt that the topics are cast in very wide
terms. None are given any time limitation - even on amendment for submission to
this Court or re-amendment for the purposes of this hearing. One of them (the
identities question) can only be made with an impermissible purpose. The last
four (again even post amendments) are not confined to matters concerning AM.
68.
Such width is a key indicator of an impermissible purpose. It is not
determinative; as Sir Richard Scott noted in Zayed "the width of
a request may be an inevitable consequence of the complexities of the issues
and of the witness's involvement in them". However there is nothing in
the evidence which suggests that there is a reason for the width of the topics.
On the contrary, as I shall explain below, the evidence is frank about the fact
that investigations are ongoing and this process is part of it.
69.
Thus after review of the Letter itself one needs to look at the evidence
under cover of which the application to this court was made; it is here that
one expects to find this court's concerns as to whether what is sought is
evidence for trial addressed. The key assertions appear to be:
i)
"At the present time Allergan has insufficient evidence as to
the extent of [AM]'s wrongdoing, to enable it to properly quantify and prove
several of its claims .. particularly its claims pursuant to the California
Common Law Tort of intentional interference with prospective economic advantage
in that Allergan seeks to show that business was diverted from it and pursuant
to California Competition Law – showing the Allergan suffered economic injury";
ii)
“The Mudan Entities will have knowledge as to where the Allergan
branded products were obtained from, who they were sold to, how much was sold
by them, that they made payments to [AM] and received payments from [AM]
…";
iii)
“Allergan believes that the information being sought from the Mudan Entities
in this application will likely identify the physical location of [AM] and the
identities of those associated with it or any third parties which enable its
operations.”;
iv)
"Allergan plans to use the evidence obtained in the US Courts to
bring the individuals who are behind [AM] into the current US court proceedings
and then successfully obtain at trial final orders that permanently stop [AM]'s
operations … In addition, the information uncovered will enable Allergan to
better quantify and prove several of its claims against [AM]."
70.
There is no specific discussion of the relevance of the oral evidence
requests. In paragraph 63 of the witness statement Ms Simpson breaks down the
documentary requests, which do overlap with the oral requests. Each of the
categories sought is justified either by being referable to quantification of
claims or identification of individuals (or on occasion, both).
71.
So far as quantum is concerned, I accept the submission that this
cannot, as matters stand, constitute a legitimate purpose for the Letter of Request.
There is no case which requires proof of quantum of loss nor indication of
intention to pursue such a case. There is, as Mr Luckhurst pointed out, a need
to show that economic loss was suffered. However there is no assertion that
this is a point which Allergan cannot prove, nor is there an assertion in the
evidence that this is one of the reasons why the evidence is sought.
72.
The high point of the evidence is the assertion that documents are
needed “to quantify and prove several” of the claims (intentional interference
being the only one mentioned). Yet while the relevance of such documents to
quantification is plain, their relevance to proof (given the existence of some
evidence via the website material and the Test Purchases as to diversion of
business and undercutting) is not; and nowhere is this point clarified.
73.
Consequently, there is no statement at any point as to what evidence is
required for the substantive proof of the existing pleaded claims. Aside from
the broad assertion as to insufficiency of evidence which leads into the
“quantify and prove” wording, there is no explanation of what legitimate reason
lies behind this request. There are however repeated assertions of purposes
which are illegitimate; and these assertions dovetail with the indications
given by the timeline, and the breadth of the oral requests.
74.
This, it seems to me, gives a very powerful indication that this is a
request whose purpose is not seeking evidence for trial, and that on that basis
the order sought cannot be made. It would probably be permissible for me to
stop here, and say that the case on jurisdiction fails.
75.
However, given this court's desire to assist a foreign court wherever
possible I will also examine the rearguard action fought on this issue by Mr
Luckhurst both in his excellent skeleton and his clear and forceful submissions,
in order to see whether a case can nonetheless be discerned for the requisite
intention to be in existence.
76.
In one sense of course the fact that these points were only made so late
in the day is itself a point which indicates that the purpose of the Letter of
Request was something different; had the intention been to obtain evidence for
trial that would have appeared earlier. But even putting this point aside it
seemed to me that all the points went either to:
i)
Investigatory matters (location and identities of the Defendants);
ii)
Quantification of loss;
iii)
Establishing what might be termed factual background (scheme and scale,
arrangement for returns etc);
iv)
Providing more evidence of matters which Allergan already have via the
Test Purchases or their other subpoenas and letters of request. These include
such matters as evidence of absence of FDA labelling, sale of the non-FDA
approved product, conditions of shipping, targeting of medical practitioners.
Also within this head is the question of proof of damage (necessary for the
intentional interference tort and also for the hurdle of irreparable harm in
relation to the injunction).
77.
At the end of the day, on the basis of what I have seen and heard, the
matter appears to stand thus. If there is no default judgment, there is no
clear sense of what evidence will be wanted, or intention to obtain it. Of course
it is not requisite for evidence to be necessary or even probative; given a
proper basis for the request, evidence will usually be ordered to be given on
the basis of relevance. Thus a letter of request seeking only material
obviously relevant to issues for trial on a “belt and braces” basis would
probably be upheld (subject possibly to questions of oppression, particularly
as regards documents): see State of Norway’s Case at p 496E. But in the
context of a letter of request where part at least is clearly impermissible, such
slim pickings as to relevance do nothing to counterbalance the weight of
indications in this case that this is fundamentally a request other than for
trial evidence and therefore one which this court has no jurisdiction to grant.
78.
If a default judgment is sought, again there is no clear picture as to
what evidence will be used and for what. Even at the hearing it was not
possible for Mr Luckhurst to point to evidence which would be needed if the
matter were to proceed to a default judgment application. In reality, the case
went no higher than to say if the matter went to default judgment some of this
evidence might well be helpful in a “belt and braces” sense. There was no
evidence as to how such an application would be prepared and what it would
include.
79.
This harmonises with the fact that as a matter of law it appears that
there is nothing standing in the way of Allergan obtaining the final relief
they seek on the materials they already have – albeit on the slightly hollow
basis of being against a defunct company and ten unidentified John Does. The likelihood
is a formal proving of an unopposed case. On the basis of the authorities I do
accept that this is not quite a rubber stamp, but absent opposition it seems
unlikely that the court will require more evidence for the injunctive relief
than that which is presently available. As I have noted, that does not appear
to be suggested; there is no suggestion of a “black hole” which may lead to
final relief not being granted.
80.
I am therefore not satisfied that in this case the relevant test is met.
Invoking the Zayed test: can the intended witnesses can reasonably be
expected to have relevant evidence to give on the topics mentioned? A very
broad relevance may be established, but this is not to any issues or to any
points where evidence is lacking for the relief sought and therefore it has no
probative value. Is the intention underlying the formulation of the topics an
intention to obtain evidence for use at the trial? It seems quite plain that it
is not – at least so far as regards the case currently pleaded.
81.
Applying a backup test which invokes the underlying jurisdiction: would
an English Court issue an outwards letter of request in such circumstances, or
a witness summons? The answer to this, it seems to me, is plainly no.
82.
In all those circumstances I conclude that the Court has no jurisdiction
to make the Order and the Order made should be set aside.
83.
I would add that I reach this conclusion with reluctance; this Court
always prefers to assist foreign courts in such matters where it is possible to
do so. No discourtesy is intended to the California Court. In this case I have
concluded that it is simply not open to me to uphold the Order.
84.
I would add that had I been minded to conclude that jurisdiction did
exist I would have held that the Letter of Request was at best what is termed a
“dual purpose” request but with a mainly investigatory character. In such a
case there is authority that the Court will generally not exercise its
discretion to make an order even though it is satisfied that the witness may be
able to give some relevant and admissible evidence: United States of America
v Philip Morris Inc, (unrep) 10 December 2003 at [76] per Moore-Bick J:
“… the court should not make an order for the examination of
a witness if it is satisfied that the letter of request is mainly of an
investigatory character, even though it is satisfied that the witness may be
able to give some relevant and admissible evidence, unless it is possible to
exclude certain areas of the request without undue difficulty.”
85.
Looking at the matters which would then have come into play, I conclude
that (again with reluctance) I would not have considered this a case in which
it was appropriate to diverge from this guidance.
86.
So far as the oral evidence request is concerned, on any view, once the
areas where trial relevance might be discerned were identified, it was plain
that this was a letter of request which required very considerable rewriting.
87.
It is not feasible or appropriate to let a letter of request which is
partly legitimate and partly illegitimate proceed without taking steps to
remove so far as possible the illegitimate portion. This is because of the
rules as to what is permissible and because of this Court’s important role in
protecting witnesses. The bottom line is that a witness based in this
jurisdiction is entitled not to be questioned beyond what would be permissible
in proceedings in Court here. The Court cannot directly control this, and
(contrary to Allergan’s submission) the Court cannot safely assume that the
examination process offers equivalent safeguards.
88.
In particular, an examiner has no power to rule (save possibly in
extreme cases of witness oppression): R v Rathbone ex parte Dikko [1985]
QB 630. Further the examiner will often not be provided with sufficient
materials to make himself/herself really familiar with the issues so as to be
able to rule as would a trial judge. It is these issues which give rise to the
dictum of Lord Woolf at [18] of State of Minnesota v Philip Morris [1998]
ILPr 170:
“Because of the general approach, …, when the court has to
choose between either giving effect to a Letter of Request or refusing to do
so, it will take into account any limitations, corrections or conditions which
the party seeking the order is willing for the court to take into account. It
will, if appropriate, be prepared to give the request an amended effect. However,
notwithstanding that, it is important to bear in mind that fishing still cannot
be permitted as part of a request. Furthermore, because of the need to hold the
balance between the requesting court and the witnesses who are to be examined,
if the request is given effect, the court will not allow uncertain, vague or
other objectionable requests to be implemented. A witness is entitled to know
within reasonable limits the matters about which he or she is to be examined.
Although there is the possibility, to which I have already referred, of matters
coming back to the court for further rulings, in general the court has to take
into account that once it makes an order it ceases to have any control of the
examination.”
(and see to similar effect the
remainder of [76] of Moore-Bick J’s judgment in USA v. Philip Morris).
89.
Accordingly a court in dealing with a “dual purpose” request will have
to, with the parties’ assistance, grapple with the process of excision and
editing to arrive at what a legitimate letter of request might have looked
like.
90.
In this case this was simply not an issue. No amendments were offered in
relation to oral evidence to deal with issues of relevance. Allergan said that
(subject to possibly confining the last requests to transactions relevant to AM
– an offer made in oral reply) the requests stood or fell as they were drafted.
Thus no grant could have followed. I should say that it may well be that no
amendments were offered here precisely because to do so would have been to
re-write the Letter of Request and while limitations are possible, rewriting is
not permitted; as explained in State of Norway No 1 [1987] 433, 484: “amendments
… may even be substantial but [there is] no authority for the proposition that
the court should, in effect, redraft a request in different terms… I would not
know how to set about doing this.” (and to similar effect RTZ at p
654).
91.
While (as discussed in more detail below) amendments were offered in
relation to the documentary request, those were essentially amendments which
went to the technical issue of specificity. They were not geared to trimming
the Order to address itself only to non-investigatory topics and thus to topics
relevant to issues for trial.
92.
Indeed because of the lack of focus on this in the Letter of Request and
the evidence in support of the granting of the Order, it is hard to see how the
Court, even with the parties’ assistance in the detailed redrafting exercise,
could have hoped to produce a result which might be said to reflect topics on
which the aim was trial testimony.
93.
I would therefore even on this basis have concluded that the correct
course was to grant the application and set aside the Order.
Jurisdiction
(documents) and amendments to the schedule of documents
94.
I will however deal briefly with the remaining issues, not least because
the position in relation to the documentary request would have been extremely
interesting, if the court had otherwise had jurisdiction.
95.
This is because when it comes to the documentary request there has been a
fairly thorough attempt to recast the schedule of requested documents as
regards specificity; doubtless because it was appreciated that it was
absolutely clear that the original Letter of Request formulation, replete with
"anys" and "alls" and cast in the broadest terms, could not
stand in the light of the statutory requirement.
96.
That requirement is the one set out in section 2(4)(b) of the Act:
"An order under this section shall not require a person:
…
(b) to produce any documents other than particular
documents specified in the order as being documents appearing to the court
making the order to be, or to be likely to be, in his possession, custody or
power."
97.
That requirement reflects (again) the underlying jurisdictional position
at the time of the Act, that a third party could only be compelled to produce
documents under a subpoena duces tecum. It therefore reflects the subpoena
jurisdiction which required specific description of documents, rather than any
form of disclosure jurisdiction.
98.
There is, as Allergan rightly say, no question as to existence of the
documents. Mr Mudan accepts he has all of these documents or has control over
them. The question is broadly the usual one in the documentary context,
specificity. But there are interesting offshoots from this.
99.
The Mudan Entities submit that the reformulation is impermissible, and that
the request is still too wide. They say this principally because some of the
requests are by reference to categories and they contend fall foul of the
guidance in Re Asbestos Insurance Cases and also because they say the
reformulation amounts to an impermissible rewriting of the categories. Little
weight was initially placed on the need in this context for amendments to be
"blue pencil" deletions only, though the point was ultimately pursued
to some extent orally.
100.
Allergan says insofar as the complaint is directed toward the fact that
some documents are listed in Schedule A by means of a description of a group of
documents, this is permissible in that the section “has been construed so as
to allow documents to be compendiously described but only so long as the exact
documents were clearly indicated, and the documents were shown to exist or to
have existed, rather than being conjectural documents”: Refco at
310F-G. The touchstone is that there should be “no real doubt in the mind of
the person to whom the summons is addressed about what he is required to do”:
Tajik Aluminium Plant v Hydro Aluminium AS [2006] 1 WLR 767, CA at [28]).
That standard, they say, is clearly met in this case, not least because Mr
Mudan has produced a schedule identifying and describing all of the documents
that remain in issue.
101.
Allergan also says that the “improper substitution” argument is a
false point. It says Topics (a) to (h) for oral examination in Schedule B are
the same as topics (a) to (h) in “Attachment 2” to the Letter of Request. The
documents specified in Schedule A are the same categories of documents identified
in “Attachment 1” to the Letter of Request. There has been a deletion of
certain items and a narrowing of the description of the remaining items, to
provide clarity to the subjects of the Order and to comply with the
requirements of the 1975 Act.
102.
This, it submits, is in line with the authorities in the context of oral
evidence that some editing is permissible: see for example, Lord Woolf in Minnesota v Philip Morris Inc [1998] ILPr 170 at [17-18].
103.
As to the blue pencil it was submitted that what had been done could
have been (and could be if the court was so minded) done by blue pencil only –
the result would be uglier and less user friendly but there would be no
difference in substance. In those circumstances it would not be appropriate to
strike down those categories. Allergan also notes that the refinement of
Schedule A involved a dialogue with the Court: Allergan initially submitted a
draft order that was closer to the wording of Attachment 1 to the Letter of Request
and was directed by Master Yoxall to re-submit the draft order in a form that
provided a tighter description of the documents sought. Having done that, the
revised order was duly granted. It was submitted that I should therefore bear
in mind the implicit view of the experienced master that such editing was
permissible.
104.
In this context I was also urged to bear in mind that under the parallel
domestic procedure the Court has considered that it has the power to amend the
terms of the summons. Thus in The Lorenzo Halcoussi [1988] 1 Lloyd’s Rep
180 at 184-5 Steyn J rejected an argument that he could only effect deletions,
saying: “In my judgment, one must regard the subpœna duces tecum as the
servant of the administration of justice, and a Court has an inherent power to
amend it in whatever form may appear necessary and just.”. Similarly in Omar
v Omar (11 Oct 1996) CA, unreported, Peter Gibson LJ stated: "the
proposition put forward elegantly by Steyn J, which I have cited, is correct.
The court ought to consider whether an amendment, particularly one which
reduces the scope of the subpoena or identifies the documents more precisely,
should be allowed."
105.
It was argued that these authorities demonstrate that, in an appropriate
case, the Court is not subject to a “straightjacket” whereby a list of
documents in a letter of request can only be refined by way of deletion and
that, were that so, it would effectively run contrary to both the wording of
the Act which enables the Court to grant any relief it could in domestic
proceedings and to the principle that the court strives to give effect wherever
possible to letters of request.
Conclusions
106.
So far as concerns the question of whether, leaving aside the blue
pencil issues, the schedule as amended complies with the requirements of the
authorities, I see the force in Ms Rosen Peacocke's submission that categories
such as "The Mudan Entities’ monthly business telephone billing records
for the period 1 January 2015 to 30 June 2017" might be said to fall foul
of the line indicated by Lord Fraser’s famous example in Re Asbestos
Insurance Cases.
107.
In the event I would not have held this to be a bar on this category had
the question of relevance been made out because I regard the authorities taken
globally to date to be as summarised in Tajik Aluminium. What matters is
whether one can spell out of the compendious description a list of individual
documents separately described and whether the witness is left in no real doubt
as to what he is being asked to bring (this, in fact, is a line which pre-dates
Asbestos Insurance Cases and can be discerned in RTZ itself).
108.
Where the witness has made no response the line may be very difficult.
Where he has responded, as Mr Mudan has done, the latter question is
effectively answered. In such cases this effectively applies a "proof of
the pudding" cross check which is consistent with the older authorities (such
as Lee v Angas (1866) LR 2 Eq 59) which suggest that if a witness is
served with an objectionably broad witness summons but admits that he has the
documents referred to in his possession he cannot later object to the breadth
of the request.
109.
What is more interesting is the question of to what extent any
reformulation beyond blue pencil deletions would have been permissible. This
point arises because what had been done was not in my judgment actually
equivalent to deletions. In particular, some additions had been made to the
wording, but with the intent of narrowing the scope of what was sought. On this
question I would make the following observations:
i)
The authorities of Lorenzo Halcoussi and Omar v Omar
cannot trump the dicta of the House of Lords in RTZ, or indeed the dicta
of the Court of Appeal in Refco which referred at [32] specifically to
deletions being the only permissible route. This is the more so as it is
apparent that the courts in the domestic cases did not have RTZ cited to
them, and so were perhaps unaware of how the position stood on authority.
ii)
However RTZ is perhaps not such a blanket prohibition as
sometimes appears. What was in issue there was (to some extent) recasting of the
substance of categories. This can be seen from the passage in Lord
Wilberforce’s judgment where he says at pp 610-11: “The Court of Appeal, as
regards the scheduled documents, applied a "blue pencil," i.e., it
deleted (as under section 2 of the Act of 1975 it is entitled to do) a number
of items, and (more doubtfully) substituted for the words "relating
thereto" the words "referred to therein." For my part I would
have applied the blue pencil still more vigorously, so as to leave in the
schedule only "particular documents specified" together with replies
to letters where replies must have been sent”. The change between “relating
thereto” and “referred to therein” is not a simple narrowing, but could
conceivably produce new results (see also Lord Diplock’s judgment at p 635G-H).
The Court was not looking at the kinds of minor drafting which is necessary to
circumscribe a request without altering its essential nature, or to give the
final touches to the necessary degree of specificity; to the extent it was the
indication of an addition of “replies” indicates that the court was not opposed
to such a change. Likewise I find it hard to believe that the court would have
objected to additions to add a date range, thereby bringing down the burden on
the witness.
iii)
This approach would bring the line to be adopted in relation to documents
much closer to that applied for oral evidence. It would also harmonise the
approach slightly more closely with CPR 31.17; the fact that the court can
offer this somewhat broader relief in domestic proceedings, and not in
assistance of foreign ones, is an anomaly which sits ill with the wording of s.
2(1) of the Act.
110.
The good sense of such an approach is vouched for by the fact that in
this case the Mudan Entities were not really pressing objections to the
reformulations except as outlined above. They did not see the addition of
limiting words (such as date ranges) as objectionable.
111.
Accordingly had relevance been made out I would have permitted such of
the redrafted documentary requests as went to areas where trial evidence was
sought.
Discretionary
issues
Oppression
112.
The Mudan Entities complain that providing copies of the documents
listed in Schedule A will be unduly burdensome because of the need to redact
documents. They also say that there is a concern that Mr Mudan or his companies
might be sued by Allergan after they have provided the relevant evidence and
documents.
113.
On the first ground Mr Mudan has produced a schedule setting out in
relation to each category of documents why he says the request is oppressive.
In essence he says that these categories of documents are voluminous and would
need to be individually reviewed and redacted to remove irrelevant and personal
data such as client names addresses and credit card numbers.
114.
Allergan disputes that this is a good objection in the light of the
facts that Mr Mudan need not do this himself and Allergan is required to pay
the Mudan Entities’ reasonable costs of producing the documents and there is no
need or justification for redaction particularly where the AM site was directed
to healthcare providers and no personal patient information would be in
question. It also points out that in concrete terms the number of documents
sought is not particularly large.
115.
This, it seems to me, is a perfectly good answer – particularly as to
the absence of justification for redaction and costs. I would not have upheld
an oppression argument on this ground on the facts of this case.
116.
As to the Mudan Entities’ concerns about their own potential liability
this is based on what is described as an ominous shift in stance by Allergan,
from describing the Mudan Entities as third parties who were able to give
important evidence, to describing them as "linked with" or
"closely connected to" AM and trailing possibly arguments as to
criminal infringements by the Mudan Entities. They refer me to the Zayed
case at 1168C-1169G and contend that the position is analogous to that
discussed there.
117.
Allergan contends that there is nothing in this oppression argument
either in that Allergan has made it clear that it currently has no intention of
suing Mr Mudan or his companies and a concern about being sued is not a
sufficient reason for not providing evidence. As explained by Moore-Bick J in Commerce
and Industry Insurance Co v Lloyds Underwriters [2002] 1 WLR 1323 at 1331: “In
the ordinary way, unless he can invoke one of the recognised grounds of
privilege, a person cannot object to giving evidence on the grounds that what
he says may be used to support subsequent proceedings either against himself or
his employer. This principle applies equally in cases where evidence is sought
to be used in foreign proceedings”.
118.
Again, had it been relevant, I would have accepted Allergan’s
submissions on this point. The case is not analogous to the position in Zayed
which was an extreme case where there was an explicit reservation of the
position as to whether the proposed witnesses would be joined as defendants to
a fraud action.
Self-Incrimination
119.
The Mudan Entities objected to the order on this ground, but at the oral
hearing this point was rightly taken very lightly by Ms Rosen Peacocke. The
bottom line is that although it is correct that the availability of such a
privilege under US Law should probably have been noted in the Letter of
Request, the absence of such a notation is hardly significant in circumstances
where (i) there is a similar privilege under English Law, (ii) there is an
established procedure for dealing with US Privilege objections, which there was
no suggestion could not be incorporated into the Order if maintained and (iii)
no objection was taken to Mr Mudan being represented at the examination by a
lawyer able to advise him on such issues.
Data Protection
120.
The Mudan Entities complained that the Order would override the EU
restrictions on transfer of personal data from the EU to the USA,
and would expose the Mudan Entities to potential penalty. They also
asserted in their witness evidence that the US Health Insurance Portability and
Accountability Act of 1996 (“HIPAA”) might present an obstacle to disclosure.
121.
Again in oral submissions this was touched on fairly lightly, and can be
addressed briefly here.
122.
This also would not provide any basis for refusal of an otherwise
legitimate letter of request on oppression grounds. The short points are that:
i)
The relevant data protection measure is the Data Protection Act 1998, section
35 of which exempts “Disclosures required by law or made in connection with
legal proceedings etc”. This would be such a disclosure.
ii)
The authorities are clear that data protection concerns do not provide
an exemption from disclosure: Dunn v Durham CC [2013] 1 WLR 2305, [21] Maurice
Kay LJ, Rugby Football Union v Consolidated Information Services
(formerly Viagogo Ltd) [2012] 2 CMLR 3, [27] Longmore LJ.
iii)
There is no evidence that the Mudan Entities are subject to HIPAA. On
the face of it, they are not.
iv)
On the evidence before me it would seem highly implausible that the
information sought falls within the definition of “Private Health Information”
within that Act, given that AM targeted healthcare providers, not individuals.
Full and Frank Disclosure
123.
The Mudan Entities do not seek to set aside the Order on freestanding
“full and frank” grounds. They do however say that Allergan was not at all full
or frank in making its application and that much of the information which has
emerged in response to the application to set aside should have been presented
in the first place. They also say that even now the position has not been
adequately explained to the Court.
124.
In particular they say that Allergan’s application should have explained
what material had already been gathered via subpoenas and early discovery and
that any other course is fundamentally unfair. They also contend that the state
of negotiations between Allergan and the Mudan Entities should have been made
plain. Further they contend that the procedural status of the California
action, in particular the fact that there is no issue in dispute, should have
been explained.
125.
Allergan, while accepting the burden of full and frank disclosure did
rest on it in making a without notice application submits that there is no
substance in any of the complaints. It says that it did make clear on the
evidence that subpoenas had been executed in the US and that Master Yoxall had
the other English letters of request before him at the same time.
126.
It says that the lack of issue in the California Proceedings was also
apparent on the face of the evidence, in explaining that the Defendant had not
responded and that identification of the real people behind AM was key. So far
as the negotiations are concerned, it says that they were without prejudice and
could not be referred to.
127.
Overall, I broadly concur with Allergan’s submissions here on the
specific points. However, I would say that I do not consider that the
obligations of full and frank disclosure were met quite as well as they perhaps
should have been. I have in mind here issues such as the overall state of the
evidence already gleaned, and the possible uses of the evidence obtained. It is
incumbent on an application for an order giving effect to a letter of request
to address the matters which go to the existence of the jurisdiction and the exercise
of the Court’s discretion and to actively draw the attention of the Court to
all relevant matters.
128.
However in a sense such failures bring their own punishment; as I have
noted above, an absence of explanation of relevance will in practical terms tend
to hamper the applicant where any question later arises. In circumstances where
a case is marginal a failure to provide a full and frank presentation may in
evidentiary terms even make the difference between the exercise of the Court’s
discretion and its refusal. Of course this is not the case here, given my
conclusion as to the overall intention underlying the request. But it is
apparent from the questions which arise at a discretionary stage that a full
and frank presentation of the initial application might otherwise have some
impact.
