Twitter, Inc. v. Voip-Pal.com, Inc.

Background

The parties disputed whether Twitter violated applicable law or the protective order by using and disclosing settlement communications in a separate action, identified in the opinion as Twitter II. VoIP-Pal alleged that paragraphs 12, 44, 45, 46, 48, and 55 of the Twitter II complaint disclosed confidential communications from before the parties’ April 15, 2021 settlement conference. It argued that Twitter relied on those communications as the basis for the separate declaratory-judgment action.

Twitter responded that the parties had not agreed that the communications were confidential. It also argued that VoIP-Pal had repeatedly failed to designate similar communications as confidential and had publicly filed earlier communications in support of a motion to dismiss the complaint in this case.

Court’s analysis

The court rejected VoIP-Pal’s argument that settlement communications are automatically confidential. After reviewing the authorities cited by the parties, the court stated that neither the Federal Circuit nor the Ninth Circuit had recognized a settlement-negotiation privilege. The court explained that settlement communications are treated as confidential when the parties agree to that treatment. It found that the parties had no such agreement, so VoIP-Pal’s unilateral expectation of confidentiality was insufficient.

The court also held that the disputed communications did not fall within the protective order. The order covered discovery materials, including certain conversations that might reveal protected discovery information. But the order defined discovery materials as information produced, disclosed, or generated in connection with discovery or required disclosures in the case. VoIP-Pal did not contend that the settlement communications concerned discovery or disclosure obligations.

The court added that, even if the relevant protective-order provision applied, the order required confidentiality designations for documents and written notice for oral communications or other information not recorded in physical form. VoIP-Pal did not contend that it made the required written designation to Twitter.

The court further rejected VoIP-Pal’s claim that its April 8, 2021 settlement conference statement later designated the earlier communications as confidential. The court said the applicable alternative-dispute-resolution rule did not turn previously nonconfidential information into confidential information. It also noted that the statement did not specifically identify the earlier settlement communications as confidential and distinct from other material that both parties agreed was not confidential.

Finally, the court rejected VoIP-Pal’s argument that its failure to designate the communications should be treated as an inadvertent disclosure of protected information. The court explained that the protective order’s provisions on inadvertent disclosure applied to protected discovery material that had received a confidentiality designation, not to the disputed settlement communications.

Ruling

The court concluded that Twitter had not violated the protective order and had not otherwise used or disclosed the settlement communications in violation of confidentiality obligations that might apply by law. The order resolved the discovery dispute without a hearing.