Family Deli Mart Corp. and Omer Hidais v. City of New York, et. al.

Background

The parties, through counsel, jointly requested a protective order under Federal Rule of Civil Procedure 26(c). The court stated that discovery would involve confidential documents or information whose public disclosure could harm the producing person or a third party owed a duty of confidentiality. The parties also acknowledged that the order would not provide blanket protection for all discovery or automatically permit confidential information to be filed under seal.

Terms of the Order

The order defines “Confidential Discovery Material” as discovery information designated confidential under the order. A designation is permitted for limited information whose disclosure is restricted by law or could harm business, commercial, financial, or personal interests. Listed examples include previously undisclosed financial information, information about ownership or control of a nonpublic company, business or marketing plans, and personal or intimate information.

Recipients may disclose confidential material only to specified groups, including the parties and their counsel, insurers and their counsel, litigation-support vendors, mediators or arbitrators, certain witnesses, experts, deposition stenographers, and the court. Certain recipients must first receive the order and sign a nondisclosure agreement. Confidential material may be used only to prosecute or defend this case and any appeals, not for business, commercial, competitive, or other litigation purposes.

The order establishes procedures for designating deposition testimony, correcting an earlier failure to designate material, objecting to a confidentiality designation, and requesting additional restrictions such as attorneys’ eyes only treatment. It also addresses discovery subject to a third party’s confidentiality obligations and permits disclosure when required by a lawful subpoena or other legal process, subject to notice requirements.

Sealing and Privilege

The order does not establish that confidential discovery material may be filed under seal. A party seeking to file material under seal must first submit a letter-motion explaining the basis for sealing, and filings containing confidential material generally must include a public redacted version and a sealed unredacted version. The court retained discretion over whether to give confidential treatment to material submitted in connection with a motion or proceeding and stated that material introduced at trial was unlikely to remain sealed.

The order further provides that an inadvertent disclosure of material protected by attorney-client privilege or work-product protection does not waive that protection. After a claim of inadvertent disclosure, the receiving party must return or destroy the material within five business days and provide a certification. The receiving party may ask the court to order production, but the disclosing party retains the burden of establishing privilege or protection.

Ruling and Effect

Judge Jeannette A. Vargas found good cause and issued the stipulated protective order. The order remains binding after the litigation ends. Within 30 days after final disposition, confidential discovery material generally must be returned or destroyed, with written certification, although attorneys may retain certain archival case files subject to the order. The court retained jurisdiction to enforce the order, and willful violations may result in contempt sanctions.