Smith v Phillip Morris Companies Inc. & Ors [2006] EWHC 916 (QB)

Case No S/06/0018[2006] EWHC 916 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 27 th April 2006
Before
MR JUSTICE ANDREW SMITH
Between
Daric SmithClaimantPhillip Morris Companies Inc. and othersDefendant
Andrew Hunter (instructed by Norton Rose) for applicantSara Cockerill (instructed by Irwin Mitchell) for respondentsHearing Hearing dates: 17 March 2006
JudgmentThe Hon. Mr. Justice Andrew Smith:
[1]On 16 January 2006 Master Turner ordered Mr Nick Brookes, Mr Keith Dunt and Mr Ulrich Herter, three former employees of British American Tobacco (Investments) Limited (which was previously known as British American Tobacco Co Ltd and to which I shall refer as “BATCo”), to attend for examination on oath under the Evidence (Proceedings in Other Jurisdictions) Act, 1975. The order against Mr Brookes has been set aside by consent. I am told that Mr Herter has not challenged the order against him. Mr Dunt is applying that the order against him be set aside.[2]The relevant provisions of the 1975 Act are as follow: “1. Where an application is made to the High Court, the Court of Session or the High Court of Justice in Northern Ireland for an order for evidence to be obtained in the part of the United Kingdom in which it exercises jurisdiction, and the court is satisfied-(a) that the application is made in pursuance of a request issued by or on behalf of a court or tribunal (“the requesting court”) exercising jurisdiction in any other part of the United Kingdom or in a country or territory outside the United Kingdom; and(b) that the evidence to which the application relates is to be obtained for the purposes of civil proceedings which either have been instituted before the requesting court or whose institution before that court is contemplated, the High Court, Court of Session or High Court in Northern Ireland, as the case may be, shall have the powers conferred on it by the following provisions of this Act. “2(1). Subject to the provisions of this section, the High Court, the Court of Session or the High Court of Justice in Northern Ireland shall each have power, on any such application as ismentioned in section 1 above, 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. “(2) Without prejudice to the generality of subsection (1) above but subject to the provisions of this section, an order under this section may, in particular, make provision- (a) for the examination of witnesses, either orally or in writing; (b) for the production of documents;(c) for the inspection, photographing, preservation, custody or detention of any property;(d) for the taking of samples of any property and the carrying out of any experiments on or with any property;(e) for the medical examination of any person;(f) without prejudice to paragraph (e) above, for the taking and testing of samples of blood from any person. “(3) 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); but this subsection shall not preclude the making of an order requiring a person to give testimony (either orally or in writing) otherwise than on oath where this is asked for by the requesting court”. (a) that the application is made in pursuance of a request issued by or on behalf of a court or tribunal (“the requesting court”) exercising jurisdiction in any other part of the United Kingdom or in a country or territory outside the United Kingdom; and (b) that the evidence to which the application relates is to be obtained for the purposes of civil proceedings which either have been instituted before the requesting court or whose institution before that court is contemplated, (a) for the examination of witnesses, either orally or in writing; (b) for the production of documents; (c) for the inspection, photographing, preservation, custody or detention of any property; (d) for the taking of samples of any property and the carrying out of any experiments on or with any property; (e) for the medical examination of any person; (f) without prejudice to paragraph (e) above, for the taking and testing of samples of blood from any person.[3]Master Turner’s order was made pursuant to a Letter of Request from the District Court of Seward County, Kansas, United States of America (“the Kansas court”), that request being made on 30 December 2005. It arises from a class action brought by a Mr Daric Smith (“the Kansas plaintiff”) on behalf of himself and others similarly situated. The class on whose behalf the action is brought is defined as the named plaintiff “and all natural persons who indirectly purchased cigarettes in the State of Kansas for consumption and not for resale from Defendants (including their subsidiaries, affiliates and agents) and co-conspirators”. The defendants are nine companies that do or did manufacture cigarettes, including BATCo and a company called Brown & Williamson Tobacco Corporation, which, according to the pleading of the Kansas plaintiff, is another company in the British American Group. I am told by Ms Sara Cockerill, who represents the Kansas plaintiff that another British American company which is referred to in the First Amended Petition as “the Defendant BAT”, is also a defendant although curiously they are not listed as a defendant in the heading to the Request.[4]The Request is for “judicial assistance to obtain evidence to be used in a civil proceeding” before the Kansas court. Under the heading “Nature and Purpose of the proceedings and summary of facts” the Letter states this:
“The Plaintiff class alleges that since November 1, 1993 [the defendants] have unlawfully agreed to fix the wholesale price of cigarettes and that, as a result, consumers of cigarettes in Kansas have paid higher prices than they otherwise would have paid. The Defendants deny liability and have denied these claims and charges. The Court has not ruled on the merits of claims of Plaintiff Class or of Defendants’ defenses”
. Under the heading “Evidence to be obtained or other judicial act to be performed” the Letter continues:
“The District Court of Seward County, Kansas requests assistance in compelling the testimony… from Keith Dunt, former Managing Director for Defendant British American Tobacco Co., Ltd. Mr. Dunt’s testimony is critical to the resolution of this case as detailed in the Affidavit of Isaac L. Diel, Esq.,… It is expected that the testimony in question will reveal that Mr. Dunt facilitated the exchange of cigarette pricing information among named Defendants in furtherance of Defendants’ price fixing conspiracy, which existed in violation of the antitrust laws of the State of Kansas…”
[5]There are three attachments to the Letter: attachment A is a list of “topics for examination”; attachment B is the affidavit of Mr Isaac Diel, who is an attorney for the plaintiff; and attachment C is the First Amended Petition, to which I have already made reference.[6]There are 17 “topics for examination” listed in attachment A. The first nine topics are couched in similar terms, namely “All communications you have had with the following former or current employees of” a named company, one being BATCo: 30 individuals are identified as former or current employees. These nine topics are unlimited in terms of the period of time that they cover. Further, seven of the nine topics are not limited by reference to the subject matter of the communication, while the other two are limited to communications relating to “cigarette pricing”. I have seen no explanation for this difference. The tenth topic refers to the first nine, and it reads “Any and all conversations Mr Dunt may have had with those individuals listed in paragraphs 1-9 regarding worldwide cigarette pricing”. It is not immediately clear quite how far the word “worldwide” restricts what conversations regarding cigarette pricing are covered, but certainly, like the first nine, this topic is unlimited in terms of when the conversations took place. One of the remaining six topics apparently assumes a “conspiracy”; and seeks “Information relating to a worldwide cigarette price fixing, market allocation, and product allocation conspiracy”: the conspiracy is not further identified. The next five topics are the following:
“Information relating to any and all agreements among worldwide cigarette competitors: including cigarette pricing, advertising, marketing, and health effects of smoking research. The nature of market competition among cigarette producers in North American and Latin America, including the sources of your information regarding this competition. Any factors that affect or influence pricing decisions regarding cigarettes, including the sources for your information in this regard. The effects of Marlboro Friday [which, I understand, as a day when the Philip Morris Group – and three companies from the group are defendants in the Kansas action – reduced the price of Marlboro cigarettes] on markets outside the US. The relationship between cigarette prices in the US and Latin America.”
The relationship between cigarette prices in the US and Latin America.”[7]The last topic is this:
“The attendees and substance of discussions at tobacco director managers’ meetings held in London for all BatCo subsidiary companies including Brown & Williamson”
. It is not restricted by reference to the date or the subject matter of the discussions. I shall refer to this topic as the “London meetings topic”: none of the other sixteen topics has any particular focus upon meetings in London, or upon meetings between executives of the British America group.[8]Mr Diel’s affidavit, the attachment B to the Request, sets out extracts from six documents. These extracts are introduced by the following:
“I have personally reviewed thousands of documents produced in this matter. Keith Dunt is the former Finance Director for Defendant British American Tobacco Co., Ltd. (“BATCo”). His name appears on many of the documents that I have reviewed and that have been produced as relevant to this litigation or as reasonably calculated to lead to admissible evidence”
. The extracts are followed in Mr Diel’s affidavit by the following comments:
“Many other examples are available should they be necessary. From the documents authored by, addressed to, or mentioning Mr Dunt, it is reasonable to conclude that Mr Dunt has critical knowledge of the price-fixing conspiracy alleged in Plaintiffs’ Petition. Plaintiffs request that this Court grant Plaintiff’s Letter of Request so that Mr Dunt will be compelled to testify and to answer Plaintiffs’ questions”
. The six documents which Mr Diel cites do not concern meetings with other BATCo executives in London, but, on their face, meetings with other cigarette manufacturers.[9]Although the Letter of Request describes Mr Dunt as the former managing director of BATCo, and Mr Diel states in his affidavit that Mr Dunt was the former finance director, the evidence before me, which Ms Cockerill did not question, is that he held neither position. From 1 January 1992 to 1 January 1996 he was the Regional Director of BATCo for Latin America and the Caribbean. Thereafter he became the Finance Director for BATCo’s parent company, British America Tobacco (Holdings) Ltd., and then from September 1998 until 31 December 2001 he was the Finance Director of British American Tobacco plc, the parent company of the Group. He retired on 31 March 2002.[10]The pleading in attachment C sets out a claim based upon a conspiracy involving the defendants and other companies, including two other companies BAT Holdings plc and BATUS Holdings Inc, who, as I assume, were or are in the British American group. The allegation is pleaded at paragraph 33 of the pleading in the following terms, “Defendants, along with their affiliates, combined and conspired on a worldwide basis which adversely effected (sic) the United States, including Kansas. Defendants’ conspiracy included price-fixing agreements as well as non-price agreements, which helped provide a foundation and support mechanism for the price-fixing conspiracy. Defendants’ non-price agreements included, but were not limited to, the joint creation of false impressions regarding the health effects of cigarette smoking; the joint control of internal scientific research; the joint control of product advertising; the joint restriction from researching and introducing “safer” cigarettes; the joint use of legal counsel and others to hide the conspiracy; and the joint coordination of marketing activities. The price fixing conspiracy was intended to directly enhance the profitability of the industry as a whole, and thereby each individual company, and even included an integrated enforcement mechanism so that the group could “retaliate” against any unilateral activity by an individual company defendant. This broad conspiracy lasted from at least November 1, 1993 to the present (“the Class Period”)”. In support of this assertion, the Kansas plaintiffs allege, inter alia, that “for decades” the defendants were party to “fix[ing] foreign prices and allocat[ing] certain customers and territories by agreement”, and that they were party to attempting to “create a seamless worldwide distribution of cigarettes, protecting their brands worldwide and operating on a coordinated basis” The pleading goes on to assert that the defendants and others during the period of the conspiracy held meetings during which they “agreed to and did eliminate, suppress and limit competition” in various ways and that “Defendants have issued price announcements in accordance with the agreements, and have participated in meetings and conversations to monitor and enforce adherence to the agreed-upon prices in the United States, including the State of Kansas”. This “combination and conspiracy” is said to have affected competition and cigarette prices in Kansas. Ms Cockerill emphasised that the allegation is of a worldwide conspiracy that had an effect in the United States, and in particular in Kansas.[11]At this point, I make four observations about the Letter and the evidence in support of the Request: first, the Letter refers to the defence to the claim in the general terms that I have set out. However, the pleaded defence or defences are not attached to the request and have not been made available to me. (I have no reason to think that Mr Dunt has copies of them, but presumably the Kansas plaintiff does.) This limits my information about what are the issues between the parties in the Kansas proceedings.[12]Secondly, neither the Letter nor Mr Diel’s affidavit states specifically that purpose of the Request is to obtain evidence which is to be used at the trial in Kansas, that the evidence would be likely to be relevant to issues in the proceedings or that it would be likely to be admissible at the trial. Ms Cockerill did not suggest that the reference to obtaining evidence “to be used in civil proceedings before this court” is so to be interpreted. She drew my attention to the statement in the request, “It is expected that the testimony will reveal that Mr Dunt facilitated the exchange of … information”, but this must, as I understand it, be referring to the expectation of the Kansas plaintiff (or those who represent him). In any case, it falls short of saying that the testimony is likely to be used at trial or that it is being sought for that purpose.[13]Thirdly, the Kansas court characterises the Kansas plaintiff’s allegation as one of an unlawful agreement since 1 November 1993, and does not treat the pleaded allegation of about “fix[ing] foreign prices” for “decades” as bringing the start of the conspiracy earlier than that. In contrast, the six documents cited by Mr Diel in his affidavit are all dated before 1 November 1993.[14]Fourthly, neither Mr Diel’s evidence nor the First Amended Petition makes any reference to meetings such as are apparently referred to in the London meetings topic.[15]The notice of application made to this Court for an order pursuant to the Letter of Request was dated 11 January 2006 (possibly in error: the Statement of Truth was dated 12 January 2006). It stated that there was an attached witness statement or affidavit, but none has been produced to me and the order of Master Turner, which was made without a hearing, recited only that he had read the Letter of Request. Ms Cockerill and Mr Andrew Hunter, who appears for Mr Dunt, understood that in fact there was no witness statement or affidavit attached to the notice, (except the affidavit of Mr. Diel which was attached to the Letter of Request) and I proceed on that basis. The evidence in support of the notice was therefore the statement in part C of the notice, together with the Letter of Request itself and its attachments.[16]The evidence in part C is this: i) That in the Kansas proceedings the Kansas plaintiff alleges that “the Defendants unlawfully agreed to fix the price of cigarettes at artificially high levels in Kansas, USA, during and beyond November 1993”. Despite the phraseology used, I do not treat this as detracting from the international (or worldwide) nature of the alleged conspiracy or agreement that Ms Cockerill emphasised. It does, however, reinforce the point that the allegation is of an agreement in November 1993 and thereafter. ii) That Mr Dunt, and indeed Mr Brookes and Mr Herter, are “witnesses of fact whose evidence is expected to be critical in the determination of the US proceedings”. However, nothing is said about the testimony being obtained for the purpose of the trial or about the likelihood of it being relevant and admissible at trial. iii) That, “For the avoidance of doubt, no disclosure is sought by the Claimant class”.[17]Mr Dunt’s application that the order of Master Turner against him be set aside is supported by two witness statements made by Ms Valerie Davies, a partner in Norton Rose, his solicitors. In her first statement, dated 16 February 2006, Ms Davies makes it clear that the application is put on two bases. First, it is said that the Kansas plaintiff is seeking to depose Mr Dunt in an effort to uncover possible new lines of enquiry and not to obtain evidence for use at trial, so that the order is not compliant with the 1975 Act and the Court had no jurisdiction to make it. Secondly, it is said that the proposed examination would be oppressive, and so the court should not exercise its discretion to uphold the order. Ms Davies said, “It appears to me that the Plaintiff’s Letter of Request is an attempt to keep the discovery process alive for as long as possible in the hope that new lines of enquiry will be revealed”.[18]Mr Alan Owens, a partner in Irwin Mitchell, who represent the Kansas plaintiff, replied in a witness statement dated 6 March 2006 that the Kansas plaintiff is “continuing the preparations for trial, including seeking the depositions of Mr Dunt and other relevant witnesses for use at trial in the Kansas action”, and so the Letter of Request is in compliance with the 1975 Act. He referred to the statement in the notice of application, and said, “Although a repetition of the assurance given in Part C of the application notice of 12th January 2006 which lead (sic) to the order of Master Turner I am instructed to confirm again that no disclosure is sought by the Plaintiff class from Mr Dunt, nor any of the other deponents. Therefore, contrary to the assertion of Ms Davies, the Plaintiffs are not in any sense seeking to keep the discovery process alive by this deposition”. It is not clear to me whether Mr Owens is here referring to the process only of disclosure or discovery of documents: clearly, assuming the order against Mr Dunt is maintained, until he and others have been deposed the process of oral discovery will not be complete in the Kansas proceedings.[19]The evidence of Mr Owens’ continues:
“Mr Dunt was the Regional Director of [BATCo] for Latin America and the Caribbean Region during the class period and was intimately involved in BATCo’s pricing and sale of cigarettes in those regions. The Plaintiffs have obtained documents produced by the Defendants which indicate that in his capacity with BATCo, Mr Dunt attended, participated in, and sometimes presided over meetings in London attended by other Regional Directors and members of BATCo’s Operating Units and subsidiaries from around the world. Given Mr Dunt’s role, in his capacity as Regional Director, in alleged price fixing discussions with BATCo’s competitors in Latin America, it is very likely that discussions of cigarette pricing occurred at the aforesaid meetings in London. Because Mr Dunt participated in and sometimes presided at these meetings, the Plaintiffs can reasonably expect him to have relevant evidence to give”
. Mr Owens does not specifically refer to the 17 topics attached to the Request, but this evidence must surely be directed to the London meetings topic. He gives no evidence that is apparently directed to the other 16 topics.[20]In response to the challenge that the examination would be oppressive, Mr Owens said that “In an effort to expedite the scheduling of Mr Dunt’s deposition, and in order to assuage Ms Davies’ concerns regarding perceived deficiencies, the Plaintiffs can give further detail as to the specific questions arising out of the topics for deposition upon which the Order was made by Master Turner”. He exhibited to his statement a document headed “Further Detailed List of Questioning which Follow from the Topics for Examination of Keith Dunt”. It began with the statement, “Each of the following topics for examination relate directly to Plaintiff’s allegations on the First Amended Petition that Defendants’ along with their affiliates, fixed foreign prices and agreed to, and did, allocate certain customers and territories, all of which effected (sic) the prices charged by Defendants for their cigarettes in the United States including Kansas.” (This is what the Kansas plaintiff pleads had been done “for decades”, and not only since November 1993.) The document then set out 43 groups of questions about 43 documents. Despite the general heading, the questions are not in their terms confined to or even directed towards “foreign prices” (which I take to mean prices outside the United States) or the allocation of specific customers or territories.[21]Mr Owens also exhibited as “AJO2” the documents which were said to be relevant to the request. Norton Rose pointed out in correspondence that this exhibit was deficient, and as a result Irwin Mitchell produced on 13 March 2006 not only a revised exhibit of 39 documents but also a revised “Further List of Detailed Questioning”, which correspondingly reduced to 39 the number of groups of questions. The revised list of questions is introduced by the same statement as the original list, which I have set out.[22]In the course of her oral submissions Ms Cockerill suggested a rather different formulation of the restriction that might be put upon the questions permitted in the examination of Mr Dunt: that the scope of the questioning be limited in that no question may be asked of Mr Dunt save only in respect of documents exhibited in “AJO 2” as revised and only to the extent that the evidence would be admissible in the trial in Kansas. The questions which had been set out by Mr Owens would, she suggested, be of assistance to Mr Dunt in as much as they were some indication to him of what he might be asked, but would not limit the terms of the order to be made pursuant to the Letter of Request. In fact, it seems to me, the questions are so general, including typically an indication that he will be asked about “the contents” of the document, that I do not consider that they would be of any real assistance in directing Mr Dunt’s attention to what questions in respect of the documents he might be asked.[23]Mr Owens and Irwin Mitchell did not explain the basis for the selection either of the documents originally exhibited to Mr Owens’ witness statement or for the documents subsequently produced in correspondence. Although I am cautious about analysing in excessive detail the examination that Mr Dunt might face under the order that the Kansas plaintiff now seeks, I should state something about the documents to which Mr Owens and then Ms Cockerill suggested it should relate so as to indicate something of their flavour and the ambit of the examination now proposed. There are, as I have said, 39 documents (or part documents): i) They are dated between February 1992 and September 1998. The majority of the documents (I cannot say precisely how many because some are undated) are dated before 1 November 1993, when according to the Letter of Request the alleged conspiracy started. They include the six cited by Mr Diel in his affidavit. ii) Only one of the documents is dated after the time that Mr Dunt was appointed the Finance Director of British America Tobacco (Holdings) Limited. It is a memorandum dated 30 September 1998 that is headed “Russia” and was apparently written after a meeting between the Russian Minister of Trade and five international cigarette manufacturers. Judging from the questions indicated by Mr Owens about this document, the passage of the document upon which the Kansas plaintiff’s interest is focused is this:
“Political situation may be stabilising a bit as most of the minor ministries are filled. Very good meeting today with Minister of Trade (Gabunya) and 5 International manufacturers. PMI [sc Philip Morris International], RJR [R J Reynolds Tobacco Company) and BAT were effectively speaking with one voice. Surprisingly, PMI voiced full support for current tiered excise tax system. RJR also chimed in their agreement. We obviously agreed and in the Tobakprom meeting with the Minister yesterday we supported the current system but suggested a large increase for imports and licensed international brands. We may have to begin importing in the name of one of our BAT Russian companies to ensure that we will be able to keep product flowing under possible legislation”
. On the face of it, therefore, the questioning would be about Russian excise tax and import policy. Its relevance to the Kansas proceedings is not explained. iii) A number of the documents refer to meetings without any indication of the subject matter, and so without any indication that any discussions related to the matters alleged in the Kansas proceedings. To give just two examples: the 39 documents include a memorandum dated 25 August 1993 in which a Mr Peter Schreer of Philip Morris invited Mr Dunt to join him for a beer or breakfast when he was in London on 30 September or 1 October 1993, an invitation that Mr Dunt declined because he was to be in South America that week, and a fax message dated 8 April 1993 in which Mr Dunt tells Mr Schreer that he might be in New York on 28 April 1993 and suggested they had a drink together. iv) Most of the documents where there is any indication about the subject matter are about the South American market (with the exception of the document about the document of 30 September 1998, to which I have referred). Consistently, perhaps, with the statement introducing the Further List of Detailed Questioning, the only document that, as far as I can see, refers more directly to the United States market is one concerning a meeting on 10 and 11 May 1994 in which there is discussion about the pack design and “pricing position” of Lucky Strike cigarettes, but it is not a document to which Mr Diel referred and Ms Cockerill did not suggest in her submissions that this is a document of special significance. v) This document referring to Lucky Strike cigarettes is the only document, or possibly one of two documents, that appears to be relevant to the London meeting topic or meetings such as Mr Owens refers to in his evidence.[24]I should explain something more about the American litigation in relation to which the Letter of Request has been issued. The Kansas action is one of a number of broadly similar proceedings that have been brought in the United States, both in the Federal courts and in the State courts, making allegations of price fixing which resulted in higher cigarette prices for consumers during the period 1993 to 2000. The Federal proceedings were consolidated into one action, known as the Multi District Litigation (“MDL”), in the United States District Court for the Northern District of Georgia under the title Holiday Wholesale Grocery Co et al v Philip Morris Inc et al. On 11 July 2002 the action was dismissed upon the defendants’ application for summary judgment. This decision was upheld on 22 September 2003 by the 11th Circuit Court of Appeals in a judgment sub nom Williamson Oil Company Inc v Philip Morris USA. The Michigan State Court dismissed the action before it at about that time, and then the plaintiffs in all but two of the State actions, the Kansas action and proceedings in New Mexico, agreed to their actions being dismissed.[25]Mr Owens’ evidence is that, as he was instructed, the Kansas action differs substantially from the MDL in that it does not merely allege conspiratorial conduct in the United States but an international conspiracy by the defendants which affected competition in the United States, including Kansas. Mr Dunt’s evidence, according to Mr Owens, is likely to be crucial in determining “the distinct international issues which will be raised in the Kansas action but was not in Holiday Wholesale”.[26]Ms Davies disputes the difference between the Kansas action and the MDL, and specifically the suggestion that the MDL did not raise comparable international issues. She states that the plaintiffs in the MDL were permitted to select up to ten incidents of foreign (non-United States) anti-competitive behaviour to support their application for foreign disclosure. All the documents cited in by Mr Diel’s affidavit attached to the Request had also been exhibited to the motion for foreign discovery in the MDL. She also points out that in support of their argument for class certification in the Kansas action those acting for the Kansas plaintiff told the Court that the MDL “alleges the same basic conspiracy as alleged in this matter”.[27]It is clear from the judgments giving summary determination for the defendants in the MDL that the plaintiffs in those proceedings did, as Ms Davies stated, assert foreign conspiracies in support of their claim that the defendants entered into an anti-competitive conspiracy in respect of prices in the United States. In the MDL the plaintiffs proffered no direct evidence about the defendants fixing prices in the United States and their case depended on circumstantial evidence and therefore the plaintiffs identified so-called “plus factors” that, it was said, “tend to exclude the possibility that the defendants merely were engaged in lawful conscious parallelism”: see Holiday Wholesale Grocery Co v Philip Morris Inc., (2002) 321 F Supp 2d 1253, 1274. One of several such “plus factors” which the plaintiffs in the MDL asserted was “foreign conspiracies”, that is to say, agreements about sales outside the United States. In this context the Courts at first instance and on appeal examined the foreign conspiracies that were alleged and concluded that “the [plaintiffs’] alleged evidence of foreign agreements to collude does not rise to the level of a plus factor”: Williamson Oil Co Inc v Philip Morris USA, (2003) 346 F 3d 1287, 1317. Thus, although agreements or collusion outside the United States were alleged in the MDL, the allegation was, as I understand it, one of circumstantial evidence deployed in support of an assertion of an agreement or collusion affecting the United States market rather than on the basis that international collusion itself affected the United States market. Certainly, in my judgment on the basis of the limited information that has been presented to me, I should not rely upon this consideration in order to set aside Master Turner’s order or to reject Mr Owens’ evidence that the Kansas action raises “distinct international issues” that were not raised in the MDL .[28]The Kansas action itself was brought in January 2001, and discovery took place between 2001 and June 2004. However, the action was dormant from June 2004 until late 2005 when the Kansas plaintiff applied for the deposition of Mr Dunt and other persons who are not party to the action. No trial date has been fixed. The defendants have, Ms Davies states, applied to have discovery declared closed and to set a timetable for expert reports and summary judgment motions, and in these circumstances, as I have indicated, she suggests that the Letter of Request is an attempt on the part of the Kansas plaintiff to keep the discovery alive in the hope that new lines of enquiry might be revealed. In support of this, she refers to a procedural memorandum dated 13 February 2006 and filed on behalf of the Kansas plaintiff in which it is said, “…discovery is just beginning, not concluding. The case will necessitate taking numerous depositions, many of them overseas”. It continued, “In short, when the written discovery is concluded (and it will be, for the most part, once the Court has had an opportunity to consider the joint defense privilege and other privilege matters asserted by Defendants) Plaintiffs can begin the deposition discovery process. That is expected to take many months, even if Defendants co-operate in producing its employees and former employees who reside overseas by producing them overseas or by producing them in the United States on either the East or West coast.”[29]I am not able to attach significance to the apparent delay in the Kansas proceedings to which Ms Davies refers. The position is, as I understand it, that the Kansas court has not yet declared that the discovery procedure is closed, and it has issued the Letter of Request. It is for the Kansas court to regulate the progress of proceedings before it, and it is not for this Court to guess about the prospects for the motion to which Ms Davies refers, still less to deny the Letter of Request upon a view as to how the Kansas court might decide it. However, it is to be noted that the Letter of Request has been issued in the course of the discovery procedure and before a trial date has been set.[30]There was little difference between the parties about the general principles which govern the approach of the English courts to applications of this kind. The following is established by the authorities: i) The jurisdiction of this Court to respond to a Letter of Request is statutory, and accordingly the Court has jurisdiction to make an order only in accordance with the provisions of the 1975 Act. ii) However, section 2(3) of the Act 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”: see In re Westinghouse Uranium Contract, [1978] AC 547 at p. 634G per Lord Diplock. That would be an impermissible investigatory exercise. iii) Subject to this limitation, the approach of the English Court is to seek to assist the foreign court whenever it is appropriate to do so: see the Westinghouse case (cit sup) at p.560H per Lord Denning MR. iv) Accordingly, if the Court receives a Letter of Request that is defective in that it does not comply with the provisions of the 1975, the Court will be prepared to make an order subject to limitations or conditions if it can properly do so and thereby remedy the defect: see for example Golden Eagle Refinery v Associated International Insurance, (unrep) 19 February 1998. v) If the Court has jurisdiction to make an order, it has a discretion whether or not to do so. vi) The Court will generally not exercise its discretion to 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: United States of America v Philip Morris Inc, (unrep) 10 December 2003 at para 76 per Moore-Bick J. vii) Otherwise, the Court is generally disposed to exercise its discretion in favour of granting requests unless it would be unfairly oppressive upon the witness to do so or there is other powerful reason not to do so. viii) In order to accede to the request of the foreign court, this Court will again in a proper case be prepared to grant the order subject to conditions or limitations designed to afford the witness adequate protection. ix) However, there will come a point when the imposition of such conditions or limitations will amount to re-writing the request or mean that the order is “going too far away from the original Letter of Request” (per The State of Minnesota v Philip Morris Inc, [1998] I L Pr 170 at para 69 per Peter Gibson LJ) for this to be an appropriate exercise for the Court to undertake: see too The State of Minnesota v Philip Morris Inc, (loc cit) at para 72 per Otton LJ.[31]As the authorities show, however, it is not always easy to apply these principles when letters of request are received from the courts of the United States. In The State of Minnesota v Philip Morris Inc, (loc cit) at para 13 Lord Woolf MR explained a difficulty that has arisen from time to time, and which arises in this case, in these terms:
“The difficulty in the present case, as in previous cases, arises because of the difference in approach to discovery in this country and the United States. Their discovery procedures are not necessarily the same in all States. But in general in the United States there is a tradition of oral discovery which has never been developed in this country. Rightly or wrongly, we regard oral discovery as a form of discovery which generates unnecessary costs and complexity. There is another difference between the approach to discovery in this county and that in the United States. Generally, there it is possible to get much wider “non party” discovery. That is discovery against those who are not parties to the proceedings.”
Lord Woolf went on to refer to what was said by Lord Diplock in In re Westinghouse Uranium Contract, (loc cit) at p.635A about section 2(3) of the 1975 Act: “The difficulty involved in the application of subsection (3) to proceedings in the United States lies in the fact that the examination of witnesses who are not parties to the action serves a dual purpose; the ordinary purpose of discovery with the wide line of inquiry which that permits and also the purpose of obtaining in the form of a deposition evidence from the witness that will be admissible at the trial in the event of the witness not being called in person”.[32]Thus the questions that arise in this case, it seems to me, are these: i) Does the Court have jurisdiction to make an order in response to the Letter of Request, and if not can this be overcome by making modifications to the order sought or imposing conditions when making it? ii) Ought the order of Master Turner be set aside because it was sought for an impermissible purpose, specifically for an impermissible investigatory purpose? If so, can this objection to the order be met by making modifications to it or by imposing conditions? iii) Ought the Court set aside the order as a matter of discretion because it is unfairly oppressive to Mr Dunt? Can this objection be met by modifications or conditions?[33]The first submission made on behalf of Mr Dunt about the Court’s jurisdiction raises the questions whether oral evidence is being sought for use at the trial of the Kansas proceedings and whether “there is good reason to believe that [Mr Dunt] has knowledge of matters in issue at the trial so as to be likely to be able to give evidence relevant to those issues”: see First American Corporation v Zayed, [1999] 1 WLR 1154 at p.1163G per Sir Richard Scott V-C. It is well recognised that “In face of a statement in letters rogatory that a certain person is a necessary witness for the applicant … the court of request should not be astute to examine the issues in the action and the circumstances of the case with excessive particularity for the purpose of determining in advance whether the evidence of that person is relevant and admissible”: see the Westinghouse case (cit sup) at p.654G per Lord Fraser. (As Moore-Bick J pointed out in United States of America v Philip Morris Inc, (unrep) 10 December 2003 at para 76, this observation appears to be directed to whether the court should enquire for itself whether the witness can give relevant and admissible evidence.) However, in this case the Kansas Court issuing the request did not itself state that the examination is likely to produce or is directed to producing such evidence. Ms Cockerill submits, and I readily accept, that this does not mean that the Request is in any way defective. Moreover, I am unable to accept Mr Hunter’s submission that requests from foreign courts “normally” include such a statement: I simply do not know whether or not that normally is the case, but even if it were, I would not therefore attach particular significance to the absence of such a statement in the Letter of Request from the Kansas court. However, this does mean that this Court may and must consider without the assistance of such a statement whether the Request is within the statutory limits.[34]I have referred to Mr Owens’ evidence that the Kansas plaintiff is seeking the deposition of Mr Dunt and others “for use at trial in the Kansas action”, but this assertion in itself does not, in my judgment, provide convincing support for the Request as it was made by the Kansas court, still less convincing support for the contention of the Kansas plaintiff that Mr Dunt’s evidence is not a matter of background significance, but “crucial” or “critical” to the litigation. Moreover, Mr Owens does not appear to acknowledge, or appear to recognise, the nature and ambit of the request made: for example, that all the documents to which Mr Diel referred were dated before the start of the pleaded conspiracy, and that the topics for examination are far wider than London meetings of the kind that Mr Owens describes that Mr Dunt is said to have had as Regional Director.[35]I have not found it easy to decide whether there is sufficient ground for believing that Mr Dunt may have relevant evidence to give on topics of relevance to issues in the Kansas action for this court to assume jurisdiction under the 1975 Act to make an order pursuant to the Letter of Request. This is not least because, without seeing or being told anything of the Kansas defendants’ pleaded case, I do not know what the issues in the Kansas action are, particularly regarding whether it is in dispute that there was a degree of co-operation between the defendant cigarette manufacturers with regard to the Latin American market. After all, there is no reason to suppose that such co-operation between manufacturers would have been unlawful by the laws of the Latin American countries directly concerned. Nor do I know whether it is in issue in the Kansas proceedings whether there were meetings of executives of British America such as Mr Owens refers to, whether Mr Dunt was party to such discussions and whether cigarette pricing was discussed at such meetings.[36]However, the approach of the English court upon this initial question of jurisdiction is, as Lord Woolf MR emphasised in The State of Minnesota case (loc cit) at para 40, “if there is doubt on this matter, I should give the benefit of that doubt to the plaintiffs”. I can see that Mr Dunt might well have some knowledge of some matters which the Kansas plaintiff asserts in the proceedings and which might, for all I know, be denied by one or more of the defendants. Although the evidence is far from satisfactory and making properly generous allowance for the approach that Lord Woolf describes, I have concluded that I should not set aside the order of Master Turner on the grounds of jurisdiction. It is therefore not necessary for me to consider whether, had the original request been defective in this respect, it could be saved by restrictions such as the Kansas plaintiff now proposes or by the sort of condition or undertaking put forward by Ms Cockerill and referred to in Golden Eagle Refinery Co Inc v Associated International Insurance Co, (unrep) 19 February 1998 (for example, that Mr Dunt would be examined as if he were giving evidence in chief at the trial or that his examination should be for the purpose only of eliciting and recording testimony appropriate to be given at trial).[37]It does not follow from this conclusion, however, that the order is sought for a permissible purpose and is not sought mainly for an investigatory purpose. Here it is proper to bear in mind the stage in the Kansas proceedings at which the order is sought: as Lord Fraser said in the Westinghouse case (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 the Golden Eagle Refinery case (loc cit).[38]The Letter of Request was couched in strikingly wide terms. Mr Hunter cites the judgment of Peter Gibson LJ in the State of Minnesota case at para 64:
“As was held in Re Norway’s Application No 1, [at [1987] QB 433] where the matters on which examination is requested by the Letter of Request to proceed, are too widely drawn, it will lead to the inference that the Letter of Request was designed to elicit information which might lead to the obtaining of evidence rather than to establish allegations of fact, and that would amount to an impermissible fishing expedition”
. Of course sometimes, as Sir Richard Scott V-C said in the First American Corporation case at p.1166, “the width of a request may be an inevitable consequence of the complexities of the issues and of the witnesses involvement in them”, but I cannot accept that in this case the very wide ambit of the Letter of Request can be so explained.[39]Moreover, the evidence of Mr Owens about the relevance of Mr Dunt’s testimony confirms my view that the Letter of Request was directed to questioning mainly of an investigatory nature. The Request ranges far wider than Mr Owens’ explanation about the significance of Mr Dunt’s testimony could possibly justify.[40]I conclude that the Letter of Request seeks an impermissible investigation and for that reason this Court should not accede to it.[41]Before I consider whether the Request should be allowed in a modified and limited form (either as proposed by Mr Owens in his witness statement or as Ms Cockerill suggested in her submissions or otherwise), I shall consider Mr Dunt’s further argument that in any event the order made by Master Turner is oppressive. As Lord Woolf MR said in the State of Minnesota case (loc cit) at para 18, there is a need to hold a balance the English court’s general wish to assist the Court making the request and the proper interests of the potential witness. The witness is entitled to know within reasonable limits the matters about which he is to be examined, and there comes a point at which a Letter of Request may be so vague that it will not be permitted. The wide-ranging list of topics attached to the Letter of Request, and the fact that many of them were unrestricted in terms of subject-matter or date lead me to conclude that for this reason too the examination sought in the Letter of Request is not one to which the Court should order and that the order made by Master Turner should be set aside.[42]I have therefore considered whether I should make a modified order or one subject to proper conditions which will adequately meet these objections. It does not seem to me that I can or should do so. Even with the limitations proposed in Mr Owens’ witness statement, the order would still be wide-ranging and, in my judgment, still be of an essentially investigatory nature. It would still go far beyond testimony such as Mr Owens describes in his witness statement when explaining the purpose of the request. Moreover, the restrictions are so radical that in reality they mean that the Request is being re-written. These same objections face the suggestion made by Ms Cockerill orally.[43]I have also considered whether I could properly accede to the Letter of Request by making more stringent modifications than Mr Owens or Ms Cockerill proposed, and specifically whether this could be done(i) by limiting further the documents about which Mr Dunt might be asked, possibly to those to which Mr Diel referred in his affidavit, or(ii) by limiting the questioning to the London meetings topic on the grounds that only this is supported by Mr Owens’ evidence. I have concluded that this would not be justified. First, the fatal objection to the modifications that were proposed would be aggravated by further restrictions: in the words of Peter Gibson LJ in the State of Minnesota case (cit sup) at para 69, the modifications would take the order too far from the original letter of request. Secondly, I do not sufficiently understand what evidence the Kansas plaintiff might properly seek as relevant and admissible trial evidence to undertake this task: for example, the documents selected by Mr Diel for citation do not, like Mr Owens’ evidence, focus upon London meetings and include reference to meetings in New York and Bagshot, Surrey, and it does not seem to me that I could properly embark upon reformulating the Request without understanding why this is so. Moreover, the London meeting topic in the Request is unlimited not only by reference to date but also by reference to subject matter, and is itself therefore wider than what Mr Owens seeks to justify in his witness statement.[44]I add that Mr Hunter also observes that the terms in which the Letter of Request is drafted makes a serious allegation against Mr Dunt personally in that it is said to be “expected” that his testimony will reveal “that he facilitated the exchange of pricing information … in furtherance of Defendants’ price-fixing conspiracy”, an allegation that Mr Dunt denies. It is said that Mr Dunt would be examined not simply as a witness but as a person accused of participation in a civil and criminal wrong. This complaint was not developed in oral submissions. I accept that, if the order were being upheld, it might well be proper to provide some protection to Mr Dunt in this regard, but it seems to me likely that appropriate provision could be made and I do not rely upon this point in reaching my decision on this application.[45]I have therefore concluded that, although this court would as a matter of general policy and comity, prefer to assist the Kansas court, it would not be right to accede to this Request. It might be that a revised letter of request for the examination of Mr Dunt could be drafted which would enable the English court to assist the Kansas court, but that is not a task that I am at present in a position to undertake in responding to Letter of Request from the Kansas Court.[46]I therefore shall set aside the order of Master Turner, and shall hear submissions upon ancillary matters and the precise form of the order that I should make.

Cited in 1 later judgment