Cameron v. Apple Inc.

Background

The parties had stipulated to a protective order that classified certain materials as “HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY,” or HC-AEO. The order limited who could view that material and required people who received it to agree to follow the order. It also required prompt steps after an unauthorized disclosure, including notifying the producing party, trying to retrieve copies, explaining the protective order to recipients, and asking recipients to sign an agreement to be bound by it.

Apple produced a large sample of transactional data under the protective order. During a December 15, 2020 public hearing about discovery, Benjamin Siegel, counsel for the Developer Plaintiffs, discussed information about the data and stated that Netflix and HBO appeared to have 15% commission exceptions predating Apple’s subscription policy. Apple argued that Siegel had publicly disclosed confidential information learned from its HC-AEO production.

Court’s analysis

Under Federal Rule of Civil Procedure 37, a court may impose sanctions for violating a discovery order, including a protective order. Rule 16 also permits sanctions when a party or attorney fails to obey a pretrial order. The court explained that bad faith is not required for sanctions under Rule 37, although the party’s good faith or willfulness may affect the appropriate response.

The court found that Siegel’s statement was based on information he had learned from Apple’s HC-AEO data production. Plaintiffs did not dispute that source. Instead, they argued that the information was already public, which would remove it from the protective order’s protection.

The court relied on July 2020 testimony by Apple CEO Tim Cook before the House Judiciary Committee. Cook stated that Apple offered a reduced 15% commission to qualifying premium video developers generally and that more than 130 apps participated in the program. The court concluded that an average reader would understand this description to include the Netflix and HBO apps. It therefore found that the commission information was already public and that Siegel did not technically violate the protective order.

The court nevertheless criticized the way the disclosure occurred. It found that Plaintiffs initially cited media reports that did not clearly reveal the information and later found Cook’s testimony while opposing the sanctions motion. The court said Plaintiffs should have sought removal of the confidentiality designation or notified Apple and attempted to resolve the issue before making the disclosure. It characterized Siegel’s conduct as reckless and as showing disregard for the protective order and Apple’s confidentiality concerns.

Disposition

The court admonished Siegel and denied the remainder of Apple’s motion for sanctions. Because the court concluded that the allegedly confidential information was actually public, it also vacated its earlier instruction requiring Apple to move to seal portions of the March 4 hearing transcript. The court stated that Apple could still file a sealing motion if it believed one was justified. The order was signed by United States Magistrate Judge Thomas S. Hixson.