Date: 19990723
Docket: T-1096-98
BETWEEN:
LEVI STRAUSS & CO. and
LEVI STRAUSS & CO. (CANADA) INC.
Plaintiffs
- and -
ERA CLOTHING INC./LES VÊTEMENTS ERA INC.
Defendant
REASONS FOR ORDER
EVANS J.:
| A. INTRODUCTION |
[1] This motion arises from an action for trade mark infringement. It is an appeal from a confidentiality order made by the Prothonotary on a motion by the defendant under Rule 151 of the Federal Court Rules, 1998.
[2] In its motion before the Prothonotary the defendant had requested a confidentiality order for certain material that it had included in its affidavit of documents. The documents in question contained confidential commercial information, such as financial information about the defendant and its sales figures. The defendant put before the Court the documents for which it was claiming a protective order so that the Court could determine whether the order should be granted.
[3] Counsel for the plaintiff did not object to the Court"s affording confidentiality to any of the documents identified by the plaintiff, but objected on three grounds to the form of the order that the plaintiff was seeking. First, it applied only to the documents that the defendant had included in its motion record. Thus, it could necessitate returning to the Court to ask for additional orders if other documents subsequently came to light for which a confidentiality claim was to be made. Second, it was unilateral in nature: that is, it did not apply to any of the plaintiff"s material. Third, it was contrary to the form of confidentiality order that it has become the established practice of this Court to issue.
[4] The Prothonotary in effect upheld the defendant"s objection, and made an order in the terms of a draft order that the plaintiff had put before him, which was similar to that granted and approved in other cases, including intellectual property litigation: see, for example, Deprenyl Research Ltd. v. Canguard-Health Technologies Inc. (1992), 41 C.P.R. (3d) 228 (F.C.T.D.); Apotex Inc. v. Wellcome Foundation Ltd. (1993), 51 C.P.R. (3d) 305 (F.C.T.D.); AB Hassle v. Minister of National Health and Welfare (1998), 83 C.P.R. (3d) 428 (F.C.T.D.).
[5] The parts of the order made by the Prothonotary relevant to this motion are as follows. The order
| (i) defines the confidential information to which it applies as "information and documents or portions of documents respectively, which are designated by any party in writing as confidential", that are to be disclosed in connection with the litigation; |
| (ii) prohibits the disclosure of such information other than in accordance with its terms; |
| (iii) provides that documents and material containing such information "when filed with the Court shall not form part of the public record. The registry of this Court shall not make such documents available to the public"; |
| (iv) "shall be without prejudice to the right of any party to apply to the Court at any time to have some or all of the confidential information or confidential documents excluded from the provisions of this order"; and |
| (v) applies to confidential information provided or produced by the parties. Any confidential information provided or produced by the parties is subject to the restrictions of the order. |
B. THE PARTIES"POSITIONS
[6] Counsel for the defendant submitted that, whatever support the previous practice of this Court had provided for this form of order, it is now prohibited by the Federal Court Rules, 1998. Consequently, the precedential value of the cases on which the plaintiff relied, which had been decided before the current Rules came into effect, must be reassessed in light of the following provision.
| Motion for order of confidentiality 151. (1) On motion, the Court may order that material to be filed shall be treated as confidential. Demonstrated need for confidentiality (2) Before making an order under subsection (1), the Court must be satisfied that the material should be treated as confidential, notwithstanding the public interest in open and accessible court proceedings. |
Requête en confidentialité 151. (1) La Cour peut, sur requête, ordonner que des documents ou éléments matériels qui seront déposés soient considérés comme confidentiels. Circonstances justifiant la confidentialité (2) Avant de rendre une ordonnance en application du paragraphe (1), la Cour doit être convaincue de la nécessité de considérer les documents ou éléments matériels comme confidentiels, étant donné l'intérêt du public à la publicité des débats judiciaires. |
[7] Counsel for the defendant relied heavily on subsection (2), and particularly the words that I have underlined. Rule 151(2) has no equivalent in the previous Rules and, according to counsel, has not yet been the subject of judicial interpretation. In making the order that is the subject of this motion the Prothonotary relied on the past practice of the Court, including an order that he made in a trade mark case in which Levi Strauss was also the plaintiff: Levi Strauss & Co. v. Roadrunner Apparel Inc. (1998), 81 C.P.R. 286 (F.C.T.D.).
[8] In appealing this order counsel for the defendant advanced a simple argument. The effect of the plain words of Rule 151(2) is that material to be filed with the Court may not be made the subject of a confidentiality order until after the Court has satisfied itself that the claim for confidentiality outweighs the generally prevailing public interest in the openness of court proceedings. Counsel submitted that the Court can only be so satisfied if it has first inspected the document and any affidavit supporting the claim for its confidentiality, and determined that there is both a subjective and an objective basis for the confidentiality claim.
[9] It would, he maintained, be contrary to the plain meaning of Rule 151(2) for an order to be made, as it was here, that was prospective in nature and permitted parties, merely on their own say-so, to claim confidentiality for any material, whether it was to be filed or not, subject only to any challenge to the claim that another party may subsequently bring before the Court. The consent of the parties cannot confer jurisdiction on the Court to make an order that does not comply with the terms of Rule 151(2).
[10] He supported this interpretation of the Rule by invoking two policy considerations. First, the check on abuse provided by the ex post facto motion by a party to "declassify" another"s document was inadequate to protect the public interest in ensuring that any derogation from the principle of openness of judicial proceedings is kept to a minimum. This is because the possibility of retaliatory motions to "declassify" material by the party whose document has been challenged is a powerful deterrent to a party contemplating a challenge to the confidentiality of a document of that other party.
[11] Second, it was unfair for the Court not to require opposing parties to challenge the confidentiality claim when it was advanced, but to permit them to return to Court later to contest the confidentiality order"s applicability to particular documents. This was both inefficient and wasteful of the Court"s resources because several requests for declassification might be made, and was likely to disadvantage the financially weaker party.
[12] Counsel for the plaintiff had no real answer to the argument based on the apparently plain words of Rule 151(2), and the consequent reduction of the authoritativeness of the earlier jurisprudence. Instead, he focussed his argument on the benefits of what has become the conventional confidentiality order granted in this Court, and the practical difficulties likely to be occasioned by the interpretation of Rule 151 advanced by counsel for the defendant.
[13] First, he submitted, it was unrealistic to expect that parties would normally be in a position to mount an effective challenge to a claim for confidentiality at the time that the claim was made. These orders are generally sought before examinations for discovery commence. Until the discovery process is well under way a party may not have the knowledge necessary to be able to assess the significance of a document and determine whether the claim that it should be treated as confidential is justifiable on an objective basis. Hence, it is virtually essential that an opportunity be provided for a party to challenge the confidentiality of particular documents after the making of the order.
[14] Second, the flexibility of what has become the usual form of confidentiality order avoids the need for parties to return to the Court on a possibly regular basis in the course of the pre-trial stages of complex litigation to seek to add other documents to the list of those subject to a confidentiality order.
[15] Third, the right of a party to challenge in the Court the confidentiality of particular documents is an adequate safeguard against potential for abuse, especially since it is the party claiming confidentiality, not the party challenging, who has the burden of proof. Furthermore, if parties decide for their own reasons not to avail themselves of this opportunity, that is their affair and not a matter with which the Court should concern itself.
[16] Finally, counsel argued that a marriage of convenience between law and policy could be readily effected through the good offices of Rule 3 of the Federal Court Rules, 1998.
| 3. These Rules shall be interpreted and applied so as to secure the just, most expeditious and least expensive determination of every proceeding on its merits. |
3. Les présentes règles sont interprétées et appliquées de façon à permettre d'apporter une solution au litige qui soit juste et la plus expéditive et économique possible. |
C. ANALYSIS
[17] It is important to emphasize that Rule 151 applies only to "material to be filed"; this limits the scope of any change in the law that it has effected. There is nothing in the current Rules indicating a change to the Court"s practice with regard to other material of a confidential nature that may be disclosed in connection with litigation. Counsel for the plaintiff stated that the order under appeal applies to all the confidential information that it describes, whether or not it is to be filed.
(1) "material to be filed"
[18] To the extent that the order under appeal applies to material to be filed with the Court it has not survived the introduction of Rule 151(2). I fail to see how an order that is made without reference to specific documents, or even classes of documents, and that will apply to material merely on the basis that a party subsequently identifies it as confidential, can be said to have been made after the Court has satisfied itself that it "should be treated as confidential notwithstanding the public interest in open and accessible court proceedings."
[19] Nor is it necessarily contrary to the fundamental values underlying the Rules to give effect to what would seem to be the plain meaning of the Rule. No one would deny that a concern for efficiency and expeditiousness properly informs the current Rules and should always be considered in their interpretation and application.
[20] However, this ought not to be at the expense of the even more important principle that, in a democratic society committed to the rule of law, limitations on the openness of the courts and the judicial process should be kept to the absolute minimum. When, in the context of the administration of justice, a clash between these values cannot be avoided, utilitarian considerations of expense and expedition should normally yield to the higher constitutional imperative.
[21] However, I am not satisfied that either Rule 151(2), or the policy considerations on which counsel for the defendant relied, prescribes the form of confidentiality order that he is seeking. In particular, I see nothing to preclude a provision in a confidentiality order permitting a party to seek at a later date the removal of a document from the order.
[22] As counsel for the plaintiff suggested, an order for confidentiality may be sought too early in the litigation process to make it fair to require that any objection to the claim for the confidentiality of a particular document be made when the confidentiality order is sought. Furthermore, the fact that the party opposing a challenge to a document"s confidentiality has the burden of proof is an adequate safeguard of the public interest in openness.
[23] Counsel for the plaintiff suggested as a fall-back position towards the end of his oral submissions that an order might include a provision stating that it applied not only to documents submitted to the Court for it to determine if it was satisfied that they should be treated as confidential, but also to any other documents of the same category or description. Thus, if the Court"s order of confidentiality included a party"s sales figures for the years 1990-98, it should not be necessary to return to the Court later to request another confidentiality order for the sales figures for 1999.
[24] This seems to me a possible solution. It would enable confidentiality orders to be made in accordance both with the wording of Rule 151, and the principle that material filed with the Court should be open to the public to the greatest degree, while at the same time minimizing practical inconveniences to the parties and the unnecessary expenditure of Court resources.
[25] In my opinion a better solution may be to discourage parties from applying for a confidentiality order under Rule 151 until they are ready to file with the Court the material for which an order is being sought. By this stage an opposing party should normally be in a position to make an informed decision as to whether to make a challenge, and to make it. The Court will then determine if the claim for confidentiality has been made out on both subjective and objective grounds.
(2) Other material
[26] To the extent that the order under appeal applies to material other than that to be filed, the strictures of Rule 151, and the interest in maintaining the accessibility of court records, do not apply. Hence, I see no reason for requiring a departure from past practice for this material, so that conventional "umbrella" confidentiality orders may continue to be issued on a bilateral basis, and in the same terms.
[27] No rule appears to provide specifically for the making of confidentiality orders with respect to material that is not to be filed, and thus does not fall under Rule 151. However, no such rule was contained in the previous Rules either. Nonetheless, the undertaking of confidentiality that is implied with respect to material disclosed in the course of discovery and elsewhere during the litigation process is sufficient to authorize the Court to issue confidentiality orders that cover material not included in Rule 151. This would seem to be an appropriate occasion for invoking Rule 4, the "gap" provision.
[28] Thus, the practical effect of Rule 151(2) may be to require a party wishing to maintain the confidentiality of particular material that it intends to file to make a second motion prior to filing. At this stage it will have to satisfy the Court on both subjective and objective grounds that "the material should be treated as confidential notwithstanding the public interest in open and accessible court proceedings."
D. CONCLUSION
[29] Since the issue raised in this appeal is a question of law, the standard of review is that of correctness, and for the reasons that I have given the Prothonotary"s order cannot stand in its present form.
[30] In these circumstances, I may substitute an order of my own. However, I have decided that it would be preferable simply to set the order aside and remit the matter to the Prothonotary so that the parties can reconsider in light of these reasons the terms of the confidentiality order granted, and any others for which they may wish to apply.
[31] For these reasons the appeal is allowed. In view of the divided success of the parties in this appeal there will be no order for costs.
OTTAWA, ONTARIO "John M. Evans"
July 23, 1999. J.F.C.C.