Opinion
1:OOMC17
April 28, 2000
W. Kearns Davis Jr., For Merck Co., Inc.
Michael E. Ray, For Novartis Crop Protection, Inc.
Larry I. Moore, III., For Collag Corp.
AMENDED MARCH 27, 2000 ORDER
On March 3, 2000, this Court entered an order staying the Application by Merck Co., Inc. ("Merck") for the issuance of two subpoenas pursuant to 28 U.S.C. § 1782. The subpoenas were sought for depositions to be used in a foreign action involving Collag Corp., Collag Ltd. (collectively, "Collag") and Merck. The stay was entered to allow other interested parties an opportunity to file a formal response. The Court received two responses.
Collag filed a response and supplemented it with the affidavit of its United Kingdom ("UK") solicitor, Alan Johnson. It does not oppose the depositions of Dr. Schmidt and Mr. Brown under the Federal Rules of Civil Procedure, but requests that the procedures be altered by order of this Court to mimic as closely as possible those which would govern if the witnesses were giving evidence in a UK court. It points out that Section 1782(a) provides that in ordering discovery, "[t]he order may prescribe the practice and procedure, which may be in whole or part the practice and procedure of the foreign country."
In that regard, Collag points out that UK litigation procedure utilizes a summarization of witness statements, which represent evidence and obviate the need for lengthy direct examination in the UK court. Documents referred to in the witness summaries must be annexed. Collag requests that this procedure be imposed on Merck's deposition application and that prior to the depositions, Merck give full witness summaries in accordance with Rule 32.9 of the UK Civil Procedure Rules. Collag further requests the imposition of Rule 31.17 of the UK Civil Procedure Rules requiring document production from non-parties and/or the UK subpoena ad testificandum procedure whereby documents can also be obtained. Collag sets out a list of documents it would like this Court to order Novartis Crop Protection AG ("Novartis") to produce prior to the depositions, as a condition precedent to Merck's application being granted.
After the filing of this Order on March 17, 2000, Novartis crop Protection, Inc. filed a motion indicating that it is a Delaware corporation headquartered in Greensboro, North Carolina, and is wholly owned by Novartis Finance Corporation, a New York corporation. It claims Novartis Crop Protection AG is a Swiss corporation which allegedly does not do business in the United States and has no ownership interest, direct or indirect, in Novartis Crop Protection, Inc. Rather, Novartis AG is the ultimate parent holding company of the Novartis Group, including Novartis Crop Protection, Inc. and Novartis Crop Protection AG.
The role of these parties with respect to the UK litigation is not entirely clear, but this matter need not be ultimately resolved by the Court. It is clear that Dr. Schmidt and Mr. Brown are employees of at least Novartis crop Protection, Inc. and that Merck intends to take their depositions as individuals, as opposed to Rule 30(b)(6) depositions of their employer. Likewise, with respect to the Court's decision that both Merck and Collag may obtain documents from Novartis, the Court directed that those documents be obtained pursuant to Fed.R.Civ.P. 45. This will require the parties to name a specific corporation. Both Merck and Collag are forewarned concerning the issues now raised by Novartis Crop Protection, Inc. to the effect that it has no connection with their controversy and Merck and Collag may wish to make additional inquiries before issuing any subpoenas.
With respect to the procedure for conducting the depositions, Collag requests that the UK practice be used whereby cross-examination is not limited to matters raised during the direct examination, that the direct examination of both witnesses by Merck take place followed by the crops-examination by Collag, and that there be a one day time gap between direct examination and cross-examination. Collag wants its UK counsel to be permitted to conduct the cross-examination. It does not object to both sound and video recording, nor to video conferencing of the depositions between the United States ("U.S.") and the UK, but requests that Merck pay the cost of any video conferencing. Last, Collag suggests that the confidentiality undertaking entered in the UK litigation be used for the depositions and also that Novartis be required to sign a confidentiality undertaking if it is shown confidential Collag documents.
Novartis, the employer of the two witnesses, also filed a response. It does not object, in principle, to the depositions of its two employees, Dr. Peter Schmidt and Mr. Robert Brown, but does object to several of the conditions sought to be imposed by Collag pursuant to Section 1782. Novartis' position is as follows, it: (1) requests that the Federal Rules of Civil Procedure be used and not the United Kingdom ("UK") Civil Procedure Rules because Novartis does not have UK counsel; (2) does not oppose both sound and video recording of the depositions; (3) does not object that UK evidentiary rules apply to the proceedings; (4) requests only one counsel per side conduct the examination and cross-examination of each witness; (5) does not object to Collag's request that direct examination of both witnesses take place before the cross-examination; (6) does not oppose video conference depositions; (7) agrees that there be a confidentiality order with respect to the depositions, but does not want to be shown confidential documents by Collag if it is required to sign a confidentiality restriction putting it at risk should it inadvertently make disclosures or make use of Collag's confidential information; and (8) agrees to produce documents which Collag seeks, but requests thirty days to produce them and desires protection if the production would be burdensome.
Merck, pursuant to the Court's direction, filed an Amended Application for discovery under 28 U.S.C. § 1782(a), and also replies to the responses of Collag and Novartis. The matter is ready for ruling.
Discussion
Before resolving the dispute, the Court notes several general principles which will guide the decision. In rendering assistance to foreign litigation litigants, a U.S. court walks the line between assisting the foreign litigation without offending the foreign tribunal. In a case such as the instant one, where only private party litigants appear before this Court, the Court may have to exercise more caution to avoid affronting a foreign tribunal than if the discovery requests came from a government or the foreign tribunal itself. John Deere Ltd. v. Sperry Corp., 754 F.2d 132, 136 (3d Cir. 1985)
In general, as a means of balancing the purported needs of the parties for discovery against the desire to avoid decisions offensive to a foreign tribunal, the courts have developed a number of factors for guiding the decision. First, the court may require the applicant to make a threshold showing that the discovery information would be discoverable in the foreign jurisdiction. This normally does not require the court to determine whether the evidence will be admissible. In re Application of Asta Medica, S.A., 981 F.2d 1, 6 (1st Cir. 1992); Lo Ka Chun v. Lo To, 858 F.2d 1564 (11th Cir. 1988). The applicant has the burden of making this showing of discoverability. In re Application of Asta Medica, S.A., 981 F.2d at 7. However, this does not mean that a U.S. court must make an extensive examination of foreign law or pretend to be an expert. Euromepa S.A. v. R. Esmerian, Inc., 51 F.3d 1095, 1099 (2d Cir. 1995). Rather, the court must keep in mind that the court's best guide may be to strive to achieve a basic sense of fairness and due process by utilizing its power to impose conditions on the discovery, and remembering that the foreign tribunal also can protect itself. Id. at 1101-02. For example, the U.S. court has an interest in making sure that one party to a foreign litigation is not using Section 1782(a) to gain an unfair advantage by conducting discovery of a U.S. party to the foreign litigation under Section 1782 and the liberal discovery procedures of the U.S. In re Application for an Order for Judicial Assistance in a Foreign Proceeding in the High Court of Justice, Chancery Division, England, 147 F.R.D. 223 (C.D. Cal. 1993).
In the instant case, the Court's task is relatively easy because the parties do not dispute that the information may be discoverable in some fashion in the UK litigation. And, because the information is sought from a non-party, it is not a situation where one party is attempting to obtain an unfair advantage over another party.
Utilizing the above principles, the Court will resolve the issues in the following manner. Because of greater familiarity with its own rules and procedures, the Court will first utilize them in order to be better able to provide even-handed enforcement than if it were trying to enforce unfamiliar foreign procedures. However, the Court will make accommodations to the special concerns of the foreign litigation — to the extent deemed practical and advisable. For example, it will order that certain foreign procedures be utilized, but leave ultimate enforcement to the foreign tribunal. The Court must also balance the interest of the non-party and any difficulty it may have in accommodating unfamiliar or burdensome foreign procedure.
First, Merck expresses concern as to some of the special UK practices proposed by Collag. Merck indicates that it will provide witness summaries, to the extent that it can, without further court order. However, Merck requests that compulsion of witness summaries not be part of this Court's order because of the difficulty this Court would have in policing such a condition due to this Court's unfamiliarity with UK practice. It argues that a UK court necessarily will examine the summaries to determine whether they comport with UK law and that this Court should not become embroiled in such a controversy. The Court agrees with Merck's arguments. It will, however, direct that prior to the depositions, Merck provide Collag with witness summaries pursuant to UK law, if such would be required. But, this Court will not enforce further Merck's compliance with that part of the order and will leave such to the UK court should it deem it appropriate. This appears to be a workable compromise that satisfies the needs of the foreign litigation without improperly or impractically injecting this Court into that litigation.
Next, Merck does not object to Collag's request that there be a direct examination of both witnesses and then a one day gap between cross-examination. However, it points out that under UK law, in instances where there is an unwilling witness, said witness is brought before the Court with documents and cross-examination begins immediately after direct examination. Therefore, a gap between examinations is not an absolute under UK law. Merck is also concerned that time constraints, especially those of the nonparty witnesses, might not permit a one day gap.
While Section 1782(a) does permit the Court to impose foreign procedures on discovery under that section, the balancing factors are expanded when a non-party is involved. The Court must take into account the burden to the non-party of imposing the foreign procedure on it. The Court concludes that the parties shall follow UK procedure to the extent possible, but because of concern for the Novartis employees' schedules, it may not be possible to give a one day gap between the direct and cross-examination. Therefore, the Court will not order that the break between examinations must be at least one day, but will grant a minimum period of four hours.
With respect to the documents requested by Collag, Merck notes that it has no control over Novartis' production, but does have a concern that Collag's request might interfere with the depositions if the request is too burdensome. The Court rejects Collag's proposal that Merck be required to alter its Fed.R.Civ.P. 45 subpoena to accommodate Collag's document requests even if that would be the procedure in the UK. Such procedure is unfamiliar to this Court and the Rule 45 subpoena process, and would make enforcement problematical and difficult. Under U.S. procedure, the request unnecessarily interjects Merck into a possible discovery dispute between Collag and Novartis. Collag would be dependent on Merck to enforce the subpoena in the face of any unwillingness by Novartis. The possibility of confusion and accusation is all but certain.
To obviate this possibility, the Court will direct Collag to serve a Rule 45 subpoena duces tecum, of its own, on Novartis for the pre-deposition delivery of the documents. This removes, at least initially, both. the Court and Merck from endorsing Collag's requests for documents, and is desirable since neither have firm knowledge of the reasonableness of the requests. This procedure also eliminates any controversy between Merck and Collag as to when the documents should be produced. Now Collag can require the documents be produced at any reasonable time prior to the depositions. Moreover, it ensures that Collag will be responsible for the cost of production. This will help ensure that the document request will be reasonable. To the extent Collag may argue that Merck would be responsible for such costs in the UK, the Court directs Collag to make such application to the UK court.
Both Collag and Novartis want the Court to set a deposition date most convenient to them. Merck's position is that it wants to make sure that the depositions take place sufficiently in advance of the June 19, 2000 trial date in England so that it has time to prepare for the trial. The Court notes that Novartis would suggest the following days for the depositions, April 4 and 5, May 2, 3, 5, and 8, and May 24 and 25, 2000. Collag requests that the Court not schedule the depositions before May 16, 2000 because of conflicting trial obligations of its UK counsel, James St. Ville.
The Court first requires all three parties to try and work out a compromise for the deposition dates. For example, if Novartis will produce all the documents sufficiently ahead of time for depositions in April or May, then perhaps Collag and Merck will make necessary accommodations. If Novartis needs more time to produce documents, then the depositions may have to occur later.
The court notes that Novartis is not a completely uninvolved non-party. It allegedly was given collag's secret information by Merck and has utilized the same. Thus, the court will not hesitate to demand that Novartis undergo some burden in submitting to the depositions.
Next, Merck and Novartis are especially concerned that Novartis not be required to submit to a confidentiality undertaking with respect to Collag documents unless Novartis agrees to do so. Merck points out that it knows of no authority which would require a non-party to review confidential documents under a confidentiality agreement, because this clearly puts an extra burden on the non-party which it otherwise would not have. The Court agrees and will not order that Novartis be required to review either Merck's or Collag's confidential documents under a confidentiality order.
In exception to Rule 30(e), and in conformance with UK procedure, Collag wants any changes in deposition testimony to be limited to errors in transcription. The Court disallows the request, but will make a slight accommodation, as set out below, to preserve the issue for the UK court. Unless stated otherwise, the depositions shall be conducted pursuant to the Federal Rules of Civil Procedure and this Court's Local Rules.
IT IS THEREFORE ORDERED that, pursuant to 28 U.S.C. § 1782(a), the Application of Merck Co., Inc. to take the depositions of Novartis Crop Protection AG employees Dr. Peter Schmidt and Mr. Robert Brown in an action pending in the High Court of Justice, Chancery Division, Patents Court, entitled, Collag Corp. and Collag, Ltd. v. Merck Co., Inc., CH 1998 C No. 3129, is granted and the Court prescribes the following practice and procedure which will apply to said depositions.
(1) The depositions shall be conducted in accordance with the Federal Rules of Civil Procedure, except that in accordance with UK procedure, Merck shall give witness summaries, to the extent possible, of the witness' testimony to Collag in appropriate time prior to the depositions. The depositions shall proceed with the direct examination of both witnesses to occur and then the cross-examination. There shall be a gap of not less than four hours between the direct examination and cross-examination. The scope of cross-examination is not limited by the subject of the direct examination. In addition to stenographic deposition, a video deposition may be taken. Any party selecting video conference deposition pays for that cost, except if both parties elect video conference depositions, they shall cooperate to reduce costs and share the cost of a video conference deposition.
(2) Both Merck and Collag may obtain documents from Novartis. The documents shall be obtained in accordance with Fed.R.Civ.P. 45. Should Collag wish documents, it is responsible for timely and promptly issuing its own Rule 45 subpoena duces tecum for predeposition production of documents.
(3) Only one attorney for each side may conduct the deposition of each witness. The permitted examining attorneys include both the U.S. and UK counsel for both Merck and Collag.
(4) The form of the confidentiality undertaking in the UK litigation shall apply to the depositions of the Novartis witnesses, unless the parties to the UK litigation and Novartis agree to another form of confidentiality agreement. Novartis and its witnesses are not required to sign any confidentiality undertaking.
(5) The witnesses are permitted to review their transcripts and make changes pursuant to Fed.R.Civ.P. 30(e), but shall note if the changes result from an error in transcription, and the Court specifically leaves to the UK court whether any other changes will be recognized.
(6) The Court sets a tentative deposition time during the month of May 2000, unless the parties otherwise agree. Counsel for all interested parties are directed to immediately confer and agree on a date within twenty days of the date of this Order, and failing to come to agreement, shall submit their positions to the Court for its decision.