Fareportal, Inc. v. HNA Group Co., LTD.

Background

Fareportal, Inc. and defendant Nishith Kumar filed a joint discovery letter about a proposed protective order. Fareportal proposed using the Northern District of California’s model protective order for cases involving patents, highly sensitive confidential information, and trade secrets. The unmodified model order would have prevented an unrepresented party from accessing information designated HC-AEO, meaning highly confidential information limited to attorneys’ eyes, or HC-Source Code. Kumar was representing himself.

Fareportal proposed allowing an unrepresented party to retain outside counsel for the limited purpose of reviewing HC-AEO and HC-Source Code material. Kumar rejected that proposal. Fareportal later proposed that parties producing protected material provide a log, similar to a privilege log, so other parties could challenge the designations.

Kumar agreed that he did not need to see source code because he lacked coding knowledge. He said he would need access to a report if an engineering firm performed a code comparison. The court stated that the source code could be removed from such a report while leaving Kumar with the analysis and conclusions. The court directed Kumar to meet and confer about any dispute over redactions and to submit a joint discovery letter if the dispute could not be resolved.

Court’s analysis

The court concluded that a log alone would not adequately address the HC-AEO issue. Because Kumar could not see the materials, he would not be able to determine whether Fareportal was improperly using the designation. The court adopted an approach requiring the designating party to identify specific categories of information, explain the harm from disclosure to Kumar, and allow Kumar to explain why he needed access. This would also give the court more information to balance the claimed harm against the prejudice to Kumar.

Order

The court ordered Fareportal to file, by October 11, 2022, a brief of no more than 15 pages identifying the specific categories of information it claimed required HC-AEO treatment and explaining why disclosure to Kumar would create an unacceptable competitive risk for each category. Fareportal also had to submit a revised model order reflecting its proposed categories and logging procedure. The court clarified that Fareportal did not yet have to complete a log; it only had to put its logging proposal in writing.

The defendants were ordered to file a response of no more than 15 pages by October 25, 2022. For each proposed category, they had to state whether they objected to HC-AEO treatment and explain how that designation would prejudice them. Fareportal could file a reply of no more than five pages by November 1, 2022, after which the court would decide whether to hold a hearing.

The court stated that the briefing did not need to address source code and approved the HC-Source Code designation because Kumar said he could not understand source code. The order was without prejudice to a party later proposing another HC-AEO category. Finally, no party could designate documents or information as HC-AEO without the court’s prior approval for that category.