Middesk, Inc. v. Osiris Ratings, Inc.

Nature of the order

The court entered a stipulated protective order in the action brought by Middesk, Inc. against Osiris Ratings, Inc. doing business as Baselayer, Jonathan Awad, and Josh Leviloff. The parties represented that discovery could involve trade secrets and confidential research, development, commercial, employment, financial, marketing, strategic, and third-party information. They stipulated that good cause existed for an order under Federal Rule of Civil Procedure 26(c), which permits a court to protect information from improper disclosure or use.

Confidentiality levels and covered materials

The order creates two designations: “CONFIDENTIAL INFORMATION” and “HIGHLY CONFIDENTIAL INFORMATION.” Confidential information includes information that is not generally known to the public or competitors and relates to specified business, technical, financial, employment, product, marketing, supply, or strategic matters, as well as information the producing party reasonably and in good faith believes would harm its business or its customers if disclosed. Highly confidential information is confidential information containing highly sensitive commercial, financial, trade secret, or proprietary material whose disclosure would likely significantly affect or harm the designating party’s business, strategy, decisions, or competitive position.

The order applies to discovery documents and things, deposition testimony, written discovery responses, hearing or trial transcripts, evidence, pleadings, court filings, required disclosures, and other information furnished by a party or third party if properly designated. Third-party discovery may be covered if the third party elects to use the order. Materials produced by a third party are treated as protected for seven days after production so the parties can review and designate them.

Access and permitted use

Protected information may be used only to prosecute or defend this action, including its possible settlement. It may not be used for research, development, manufacturing, patent prosecution, financial, commercial, marketing, regulatory, business, or other competitive purposes. Copies, summaries, notes, and information derived from protected materials receive the same protection.

Access to confidential information is generally limited to litigation counsel and necessary staff, one qualifying in-house lawyer or designated employee for each party, approved experts and consultants, the court and its staff, court reporters and videographers, interpreters, litigation-support vendors, and other persons agreed to in writing. Highly confidential information is limited to the narrower group identified in the order and excludes the parties’ in-house personnel. Other people may receive access by written agreement or court order, subject to the order’s requirements. Certain individuals who previously prepared, received, reviewed, or knew the information, as well as certain witnesses and experts, may also be shown the information during depositions, trial, or hearings as specified in the order.

Designations, challenges, and inadvertent disclosures

Parties and third parties must mark protected documents and things with the applicable confidentiality legend. Deposition transcripts may be designated during the deposition or within 30 days after receipt of the official transcript. The order permits good-faith privilege redactions marked “Redacted Privilege” and requires privilege logs for documents withheld or redacted on privilege grounds.

A receiving party may challenge a confidentiality designation in writing. The designating party must respond within five business days, after which the receiving party may seek court relief through the court’s discovery-dispute procedures. The party asserting confidentiality bears the burden of showing that protection is warranted.

The order also addresses accidental production of confidential or privileged information. A producing party may correct an inadvertent confidentiality designation by written notice within 10 business days after learning of the production. For inadvertently produced privileged or work-product material, the producing party must give reasonably prompt written notice stating the claim and its basis; the receiving party must make best efforts to return, sequester, or destroy the material within five business days after a written request, while retaining the ability to contest the privilege claim. Separate procedures require prompt notice and efforts to recover information disclosed to an unauthorized person.

Depositions, hearings, and court filings

During depositions, counsel may ask unauthorized people to leave while confidential information is discussed. Counsel must confer with the court about protecting such information at hearings and trial. Confidential material filed with the court must follow the Southern District of New York’s sealing procedures. No document may be filed under seal without a further court order addressing the specific material, and the party seeking protection bears the burden of showing that sealing is appropriate.

Duration and disposition of materials

The confidentiality obligations continue after the action ends for information that remains nonpublic. Within 90 days after final termination of the action, including appeals, materials generally must be returned to the producing party or destroyed, subject to specified retention rights for outside litigation counsel and other exceptions in the order. The restrictions continue until a further court order, and they may be waived or terminated only by court order for good cause. The order becomes effective upon filing with the court, subject to later modification by agreement of the parties or by the court.

Effect of the ruling

Judge P. Castel’s order governs the handling of information in discovery. It does not determine the merits of Middesk’s claims or Osiris Ratings, Awad, or Leviloff’s defenses, and it does not decide whether any material is ultimately admissible at trial.