Federal Court Decisions

Date: 20171026

Docket: T-2280-12

Citation: 2017 FC 957

Ottawa, Ontario, October 26, 2017

PRESENT:     The Honourable Mr. Justice Zinn

ORDER AND REASONS

[1]               Before the Court are two motions: (1) a motion brought by the Defendants [Pfizer] for an Order granting them leave to amend their Statement of Defence and Counterclaim, and (2) a motion brought by the Plaintiff [Teva] for an Order that portions of Pfizer’s motion record and paragraphs 28B (c) to (e) of the Amended Statement of Defence and Counterclaim be redacted in the Court’s public file.

[2]               My view of these motions is captured best in the line spoken by Mercutio as he lay dying: "A plague o' both your houses!" (Romeo and Juliet, Act III, Scene 1).

[3]               Pfizer’s motion was unnecessary when it was filed because Teva, without condition, had consented to the proposed Amended Statement of Defence and Counterclaim (attached hereto).  Notwithstanding having the consent in hand, Pfizer, for reasons that appear to be in the nature of some tactical advantage, filed its motion.

[4]               Teva, having given its unqualified consent to the amendment, attempted to retract its unconditional consent after Pfizer advised that it would be filing its motion record with the Court.  Teva also brought its own cross-motion seeking a confidentiality Order relating to Pfizer’s motion record and an Order redacting parts of the Amended Statement of Defence and Counterclaim.

[5]               Pfizer’s threat to file and the subsequent filing resulted in the Court holding an urgent 25 minute case management conference, Teva bringing its cross-motion, and the setting aside of 3 hours to hear these motions.  Each of these appearances occupied the time of four counsel, a Court Registrar, and this Judge. 

[6]               Had Pfizer not acted as it has, then it would now have its amended pleading, and none of the wasteful steps outlined above would have occupied this Court’s time or consumed its limited resources.

[7]               Given my findings and disposition of these motions, it is valuable, in my view, to provide the following timeline and recitation of the statements and positions of the parties.

[8]               This action relates to Pfizer’s Viagra (sildenafil citrate) pharmaceutical.  Pursuant to section 8 of the Patented Medicines (Notice of Compliance) Regulations SOR/2006-242, Teva seeks compensation for damages it alleges it suffered from being unable to market its sildenafil tablets.

[9]               Pfizer asserted at paragraph 28(c) of its Statement of Defence and Counterclaim that if it was found that Teva was entitled to claim damages, then any assessment must take into account “the propriety of any rebates and professional allowances (whether cash payments, free goods or reduced prices) rendered in association with the Teva Tablets.”

[10]           In its Reply, Teva responded that this allegation regarding its rebating practices was “without any factual basis” and it reserved its right to seek to have these paragraphs struck pursuant to Rule 221 of the Federal Courts Rules.  In its Reply to Defence to Counterclaim, Pfizer provided particulars regarding its allegation that Teva’s impropriety in failing to comply with Provincial legislation.

[11]           Examinations for Discovery were held.  Teva produced as its representative, Scott Sherwood, Associate Director of Business Finance.  Pfizer asked a number of questions relating to Teva’s rebate and professional allowance practices.  Pfizer, believing it had obtained significant admissions regarding the propriety of these practices, advised Teva that it would be amending its Statement of Defence and Counterclaim to particularize these allegedly improper practices.  By letter dated July 20, 2017, counsel for Pfizer wrote to counsel for Teva, as follows:

We write to advise you that Pfizer will be bringing a motion to amend its Statement of Defence and Counterclaim.  We enclose an electronic copy of Pfizer’s Motion Record, in both its public and confidential form, which is hereby served upon you in accordance with the parties [sic] agreement to accept electronic service and the Federal Court Rules [sic].  Hard copies will follow by overnight courier.

[12]           Counsel for Teva responded providing his client’s consent to the proposed amendment, advising that Teva would be “providing corrected responses” to the answers given at Discovery, and stating that as Pfizer had Teva’s consent, no motion was required.  In correspondence dated July 27, 2017, counsel for Teva wrote to counsel for Pfizer, as follows:

I write in response to your letter of July 20, 2017 wherein you advised that Pfizer seeks to amend its Statement of Defence and Counterclaim.  I have received instructions from Teva to consent to the proposed amendments.

As a first point, much of the testimony which Pfizer seeks to rely upon is inaccurate and, in accordance with rule 245 of the Federal Courts Rules, we will be providing corrected responses shortly.

Moreover, Teva takes issue with the manner in which you have prepared the material for the public version of the motion record you served on July 20.  The transcripts have been marked “Confidential” in their entirety and it is not within your client’s purview to unilaterally ignore that designation, as it has done.  If the motion record were to be filed, Teva would insist that the transcripts be redacted in their entirety.

That said, as Teva has consented to the amendments, there is no reason to file the motion record and Teva expects that it will not be filed.  If this is not so, please advise immediately so that Teva can bring a motion to protect its confidential information.

[emphasis added]

[13]           On July 28, 2017, counsel for Pfizer wrote to express serious concerns about Teva’s “unexplained delay in its intent to correct its evidence” stating: “Conveniently, it was only after Pfizer served its motion to amend on Teva based on Sherwood’s evidence that Teva now seeks to correct Sherwood’s evidence.  Teva’s actions are telling.”

[14]           Counsel for Pfizer also responded on July 31, 2017, to the inquiry as to whether Pfizer, in the face of Teva’s consent, would proceed to file its motion: “Pfizer will be filing the public version of its motion record, which it has a right to do” [emphasis added].  That resulted in a response from Teva, and an email from Teva to the Court seeking an urgent case management conference.

[15]           Teva’s letter to Pfizer dated July 31, 2017, reads as follows:

I write in response to your letter of July 31, 2017 wherein you advised that Pfizer continues to intend to file a motion for leave to amend its Statement of Defence and Counterclaim notwithstanding that you will receive Teva’s consent to the proposed amendments.

Obviously, Pfizer’s motion is unnecessary, as leave is not required.  That of course, shines a bright light on Pfizer’s real motivation to nevertheless publicly file material that it neither required nor necessary in light of Teva’s consent.  It also raises the spectre of improper disclosure and a potential breach of the implied undertaking of confidentiality.  Public disclosure of compelled (and inaccurate) material cannot be permissible where it is entirely unnecessary.

In addition, of course, requiring Teva to bring a motion where none is required places an entirely unnecessary burden on the Court and on Teva particularly in circumstances where Teva reasonably believed that providing consent to the pleading amendments would obviate the need for a confidentiality motion.

As you know, we have requested an immediate Case Management Conference before Justice Zinn, at which we will bring your client’s conduct to his attention.

[emphasis added]

[16]           At 4:51 p.m. on July 31, 2017, counsel for Teva emailed the Court alerting it and Pfizer that Teva would now be seeking redactions in the Amended Statement of Defence and Counterclaim:

Teva will be making submissions on the treatment of the proposed amended statement of defence and counterclaim on tomorrow’s Case Management Call.  Until that has taken place we respectfully ask that the draft pleadings not be placed onto the Court file. [emphasis added]

[17]           In the case management conference which commenced at 10:30 a.m. on August 1, 2017, counsel for Teva, informed the Court and Pfizer that he was instructed to bring a motion seeking an order sealing potions of the motions materials filed by Pfizer, which Teva asserted to contain confidential information and redacting paragraphs 28B (c) to (e) of the Amended Statement of Defence and Counterclaim.

[18]           The Court determined that Pfizer’s motion to amend and Teva’s confidentiality motion would be heard in Toronto on October 5, 2017, and that all materials would be sealed in the Court file pending the determination of the motions.

[19]           When these motions came on for hearing, the Court, in light of Rule 200 of the Federal Courts Rules, asked counsel for Pfizer why its motion for leave to amend had been filed.  Rule 200 provides as follows:

Notwithstanding rules 75 and 76, a party may, without leave, amend any of its pleadings at any time before another party has pleaded thereto or on the filing of the written consent of the other party.  [emphasis added]

[20]           Notwithstanding numerous valiant attempts by Mr. Pasparakis, no response satisfactory to the Court was provided; because, in my view, there is none.  Just because a party has a “right” to do something, as Pfizer asserts, does not mean that it should do so when the Rules provide for and less expensive and less time-consuming way to obtain the result requested.  The motion for leave to amend was and is unnecessary in light of Teva’s consent.  Pfizer’s filing of its motion, as I expressed at the hearing, was abusive of this Court’s processes and procedures, and unnecessary.

[21]           The consequence of Pfizer filing the motion was that Teva had time to attempt to resile from its previous unequivocal and unconditional consent to the amendment.

[22]           At the hearing, counsel for Teva conceded that if the Discovery transcripts could be read to reflect the allegations set out in paragraphs 28B (c) to (e) of the Amended Statement of Defence and Counterclaim, then there was no basis warranting their redaction.  In my assessment, that test has been met.  Teva acknowledged as much given that it now seeks to “correct” the responses given at Discovery.

[23]           Teva, having consented without condition to the filing of the Amended Statement of Defence and Counterclaim, should not have sought, only three days later, to resile from that consent.  It too has abused the Court processes.

[24]           Pfizer is principally at fault for the wasted judicial resources that these events have caused.  The proximate cause was Pfizer’s decision, notwithstanding having in hand Teva’s consent to the amendment it sought, to file a motion for leave to amend its pleading.

[25]           There may be some confidential and proprietary information in the materials that have been filed.  Teva asserts that there is.  Given that none of the materials filed on these motions ought to have been filed in the first place; I find that any further consideration by the Court as to what, if any materials ought to be redacted or sealed would be an additional waste of judicial resources.  Accordingly, I will direct the Registry to remove all of the filed materials from the Court record and return them to the filing party, save and except any Judge’s copies which are to be shredded.

[26]           In my view, neither party is entitled to costs: Pfizer ought never to have brought this motion, and Teva ought not have played tit-for-tat and withdrawn its unconditional consent.  I only regret that I am unable to order both parties to compensate the Court for its losses.

ORDER IN T-2280-12

THIS COURT ORDERS that:

1.                  The Registry is directed to accept for filing the Amended Statement of Defence and Counterclaim attached hereto; and

2.                  The Registry is directed to remove from the Court files, both public and sealed, and to return to the party filing the materials (save for the Judge’s copies which shall be destroyed), all documents filed by either of the parties hereto relating to Pfizer’s motion for leave to amend its pleading, and Teva’s cross-motion for a confidentiality order and redaction of the materials filed on these motions.

"Russel W. Zinn"

FEDERAL COURT

SOLICITORS OF RECORD

APPEARANCES:

SOLICITORS OF RECORD: