FEDERAL COURT OF AUSTRALIA Courtney v Medtel Pty Limited [2001] FCA 949 DISCOVERY – Representative Proceedings – Confidential documents – Application to restrict use of discovered documents. Federal Court of Australia Act 1976 (Cth), ss 33X and 33ZB(b). Trade Practices Act 1974 (Cth), ss 74B, 75AD, 52 and 82. Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10, cited. Allstate Life Insurance Co v Australian and New Zealand Banking Group Ltd (1995) 57 FCR 360, cited. Church of Scientology of California v Department of Health and Social Security [1979] 1 WLR 723, cited. Bray on Discovery (1885) KEVIN GLYNN COURTNEY in a representative capacity on behalf of all persons in whom St Jude Tempo Pacemakers were surgically implanted in Australia v MEDTEL PTY LIMITED N 661 of 2000 SACKVILLE J SYDNEY 20 JULY 2001 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 661 OF 2000 BETWEEN: KEVIN GLYNN COURTNEY in a representative capacity on behalf of all persons in whom St Jude Tempo Pacemakers were surgically implanted in Australia APPLICANT AND: MEDTEL PTY LIMITED FIRST RESPONDENT ST JUDE MEDICAL, INC, a Minnesota corporation with its principal place of business at One Lillehei Plaza, City of St Paul, County of Ramsey, State of Minnesota. SECOND RESPONDENT PACESETTER INC, a Delaware corporation with its principal place of business 15900 Valley View Court, Sylmar, California THIRD RESPONDENT JUDGE: SACKVILLE J DATE OF ORDER: 20 JULY 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application be dismissed. 2. The respondents pay the applicant's costs of the application. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 661 OF 2000 BETWEEN: KEVIN GLYNN COURTNEY in a representative capacity on behalf of all persons in whom St Jude Tempo Pacemakers were surgically implanted in Australia APPLICANT AND: MEDTEL PTY LIMITED FIRST RESPONDENT ST JUDE MEDICAL, INC, a Minnesota corporation with its principal place of business at One Lillehei Plaza, City of St Paul, County of Ramsey, State of Minnesota. SECOND RESPONDENT PACESETTER INC, a Delaware corporation with its principal place of business 15900 Valley View Court, Sylmar, California THIRD RESPONDENT JUDGE: SACKVILLE J DATE: 20 JULY 2001 PLACE: SYDNEY REASONS FOR JUDGMENT the proceedings 1 The applicant commenced representative proceedings in this Court on 22 June 2000, pursuant to Part IVA of the Federal Court of Australia Act 1976 (Cth) ("Federal Court Act"). According to the third amended statement of claim, the applicant brings this action on his own behalf and on behalf of the members of a group (the "Group Members") consisting of persons who have had a St Jude Medical Tempo Pacemaker, model number 1102, 1902, 2102, 2902 (the "Pacemaker"), surgically implanted by a doctor in Australia. The pleading estimates that there are 992 Group Members. 2 The applicant pleads that the first respondent ("Medtel"), a company incorporated in New South Wales, was in the business of importing, marketing and distributing medical devices in Australia, including the Pacemaker, under the business names "Cardiac Rhythm Solutions" and "Medtel Australia". The third respondent ("Pacesetters") is said to be the manufacturer of the Pacemaker. The second respondent ("St Jude") is said to have been involved in the marketing of the Pacemaker. Both St Jude and Pacesetters are incorporated in the United States. 3 The statement of claim describes the Pacemaker as "a cardiac device manufactured and used for the particular purpose of being surgically implanted on the advice of doctors inside the human body attached to the heart so as to restore and maintain a normal heart beat by providing an electrical impulse or energy or beat that is carried through leads to the heart. The Pacemaker is triggered by an irregular pulse in the user to send a series of light electric pulses activating a regular heart beat." It is alleged that the Pacemakers had a fault, namely that they "were prone to a circuitry problem, resulting or likely to result in accelerated battery depletion and consequential failure of the device, whereby the Pacemaker may cease to function without any prior warning or indication." 4 The applicant pleads that the Pacemaker was not reasonably fit for its purpose within s 74B of the Trade Practices Act 1974 (Cth) ("Trade Practices Act") and had a "defect" which caused injury to the applicant and Group Members within s 75AD of the Trade Practices Act. Each of the respondents is said to have engaged in misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act. They are also said to have breached a duty of care owed by them to the applicant and the Group Members. The applicant seeks declaratory relief, compensation pursuant to ss 74B and 75AD of the Trade Practices Act and damages under s 82 of the Trade Practices Act and under the general law. DISCOVERY 5 The respondents have filed and served a verified list of documents by reference to categories of documents specified by the applicant. The documents discovered by the respondents include some which identify particular patients, recipients of pacemakers or treating medical practitioners. Some of the persons so identified are resident in Australia while others are not. 6 On 15 June 2001 I made an order by consent as follows: "1. In relation to documents discovered by the first, second and third respondents, the applicant is permitted to inspect documents containing information identifying specific patients, pacemaker recipients or treating medical practitioners (whether they be resident in Australia or elsewhere) ("the documents") on condition that: (a) the documents and the contents of the documents be kept confidential and not disclosed or communicated to any person other than: (i) the solicitors acting for the Applicant in these proceedings ("the Proceedings"); (ii) counsel appearing in the Proceedings; and (iii) any medical or technical expert retained by the applicant's solicitors in connection with the Proceedings ("an Expert"); (b) if a document containing information identifying a specific patient or treating medical practitioner or its contents are to be disclosed to an Expert, the Solicitors for the applicant must first obtain a signed undertaking from that person in terms of the document annexed hereto and marked "A"; (c) signed copies of the undertakings referred to in Order 1(b) must be provided to the solicitor for the respondents within 24 hours of being executed; and (d) on completion of the need to use the documents for the proceedings, the applicant's solicitor recover any copies of the documents which have been provided to an Expert or any other person and return them, together with any copies of the documents in the possession of the applicant's solicitor or counsel, to the solicitor for the respondent." THE ORDER SOUGHT 7 The respondents now seek an order in the following terms: "No patient, pacemaker recipient or treating medical practitioner (whether they be resident in Australia or elsewhere) is to be contacted by the Applicant's solicitors or any other person using any information (including the person's name) obtained from the documents without the prior leave of the Court." 8 The respondents submitted that much of the information disclosed by the discovered documents is confidential because it relates to patients' health or to medical treatment they have received. It is said that many patients are elderly, have a cardiac condition and live alone or with elderly partners. According to Mr Clark, who appeared with Mr Loveday and Ms Harris for the respondents, an order of the kind proposed would balance the interests of justice with those of the individuals, whose privacy is at risk of being violated. Mr Clark was at pains to disclaim any suggestion that the applicant or his legal representatives would use the information obtained in discovery in a manner other than that permitted by law. Nonetheless, he contended that this was an unusual case which warranted special orders. 9 Mr Bannon SC, who appeared with Mr Clarke for the applicant, acknowledged the importance of preserving the integrity of the opt-out procedure provided for by s 33X of the Federal Court Act. He accepted that until that procedure is complete (notices have not yet been sent to Group Members) the applicant should not use the discovered documents for the purpose of contacting Group Members. Subject to that constraint, however, he submitted that there should be no restriction on the use to be made of the discovered documents. He pointed out that the applicant is subject to the restrictions imposed by the general law. Moreover, so he argued, to place the Court in the position of having to grant leave prior to the applicant making contact with patients or medical practitioners would place it in the invidious position of having to supervise the applicant's preparations for trial. reasoning 10 The applicant's legal representatives are not at large in the use they can make of the discovered documents. In Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10, Mason CJ (with whom Dawson and McHugh JJ agreed) said this (at 32): "In relation to documents produced by one party to another in the course of discovery in proceedings in a court, there is an implied undertaking, springing from the nature of discovery, by each party not to use any document disclosed for any purpose otherwise than in relation to the litigation in which it is disclosed." His Honour also cited an extract from Bray on Discovery (1885), at 238, as follows: "A party who has obtained access to his adversary's documents under an order for production has no right to make their contents public or communicate them to any stranger to the suit...nor to use them or copies of them for any collateral object…. If necessary an undertaking to that effect will be made a condition of granting an order." See also Allstate Life Insurance Co v Australian and New Zealand Banking Group Ltd (1995) 57 FCR 360, at 378-379, per Hill J. 11 There is no suggestion here that the applicant or his legal representatives intend to breach the undertaking implied by law in relation to the discovered documents or to act improperly in any way. This distinguishes the present case from the authority most strongly relied on by the respondents, Church of Scientology of California v Department of Health and Social Security [1979] 1 WLR 723. In that case, which involved access to documents discovered in the course of defamation proceedings, Brandon LJ identified the issues as follows (at 743): "First, is it shown that, if the plaintiffs are given an unrestricted right of inspection of the defendants' documents, there is a real risk that they would use such right for a collateral and harmful purpose? Second, if so, does the court have power to impose restrictions on the plaintiffs' right of inspection in order to prevent or discourage such use? If the court has such power, third, what kind of restrictions can be imposed? Fourth, what method should the court use to impose them?" The first question was answered in the affirmative, there being a risk that the plaintiffs would use the right of inspection for the collateral and harmful purpose of harassing their critics. Ultimately, on the basis of this finding, the Court made orders preserving the confidentiality of the documents, except where counsel advised in writing to the contrary (see at 742). 12 It is true that some of the documents discovered by the respondents include information that can fairly be described as confidential. Mr Clark tendered, as an example, a letter from a specialist cardiologist to (so it would seem) a general practitioner concerning a particular patient. (He did not explain how a copy of this letter came to be in the custody, care or control of the respondents.) But there is in place a confidentiality regime which prevents dissemination of confidential information of this kind to persons other than the legal representatives and experts acting for or retained by the applicant. This regime provides an important measure of protection to patients and medical practitioners concerned about preserving confidentiality. 13 According to Mr Clark, the respondents' principal concern is that the applicant might use the information in discovered documents to contact persons who have had Pacemakers implanted and that this contact may distress the patients or their families. As I have discussed with the parties when settling the form of opt-out notice, I think that a Court hearing a representative proceeding pursuant to Part IVA of the Federal Court Act should be sensitive to the dangers of inflicting unnecessary distress on members of the represented group or indeed third parties. But this does not mean that inappropriate restrictions should be placed on a party's access to documents produced on discovery where those documents (as is accepted in this case) are relevant to the issues in dispute. 14 In the present case the parties have in substance agreed that the opt-out notice required by s 33X(1) of the Federal Court Act should be sent by registered mail to each Group Member at his or her address as recorded in a database maintained by the respondents. This procedure (which I shall address in a separate judgment) is designed to ensure that each Group Member has a genuine opportunity to make an informed decision whether or not to participate in the proceedings. In any event, when the date fixed by the Court for Group Members to opt out of the proceedings has arrived, it will be possible to ascertain which Group Members have and have not opted out. Any Group Member who does not opt out remains a member of the group on whose behalf the proceedings are conducted and ordinarily will be bound by any judgment in the proceeding: Federal Court Act, s 33ZB(b). It is difficult to see why the leave of the Court should be required before the solicitors for the applicant can contact Group Members who have not opted out of the proceedings (and therefore remain part of the represented group), bearing in mind that the solicitors may do so only for a purpose relating to the litigation and not for any collateral or improper purpose. 15 So far as persons who have had a Pacemaker implanted but are not Group Members (either because they have opted out or because they are not within the Group as defined in the pleadings), it is difficult to see why the applicant's legal representatives would wish to contact them for a purpose relating to the litigation. Mr Clark was not able to suggest a reason why such contact should be regarded as likely. If such persons are to be contacted, however, it can only be for a purpose genuinely related to the litigation. In the absence of any evidence that the applicant or his legal representatives may contact persons for a purpose not generally related to the litigation, I do not think an order should be made in the terms suggested by the respondents. 16 Independently of the matters to which I have referred, it seems to me undesirable for the Court to be asked to give its imprimatur to the applicant's legal representatives making contact with particular persons or classes of persons. Given that the contact will not breach any implied undertaking by the applicant and his legal representatives, it is far from clear what criteria the Court could apply to determine the appropriateness of the contact. Certainly Mr Clark did not formulate such criteria. In any event, assuming such criteria could be formulated, there is an obvious risk that the Court would be drawn into inquiries that ought properly to be the province and professional responsibility of the applicant's legal representatives. There is therefore a further risk that the Court's role as an impartial adjudicator between the parties would be threatened. conclusion 17 In my view, the respondents have not established a case for the relief they seek. Accordingly, the application should be dismissed. The respondents must pay the applicant's costs of the application. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice SACKVILLE. Associate: Dated: 20 July 2001 Counsel for the Applicant: Mr A J Bannon SC with Mr J Clarke Solicitor for the Applicant: Maurice Blackburn Cashman` Counsel for the Respondent: Mr S Clark with Mr C Loveday Solicitor for the Respondent: Clayton Utz Date of Hearing: 17 July 2001 Date of Judgment: 20 July 2001