Smith v. Bradley Pizza, Inc.

Background

The court had entered a protective order on July 9, 2018. It allowed parties to mark discovery documents as confidential and provided that documents marked confidential could be used only in this case. The order also limited who could receive those documents and provided a procedure for challenging a confidentiality designation.

The defendants’ counsel represented defendants in this case and in two other cases in which Scott Smith was the plaintiff: the Golden China case and the Bierstube case. The parties coordinated some discovery among the three cases, including Smith’s deposition and expert depositions. Bradley Pizza and Pamela M. Dahl separately obtained an order requiring Smith to produce non-confidential settlement agreements from similar Americans with Disabilities Act lawsuits and documents showing compensation he received from those lawsuits. Smith produced eleven settlement agreements and marked them confidential under the protective order.

Defense counsel later filed those agreements and referred to related compensation information in summary-judgment briefing in the Golden China case. After Smith objected, defense counsel also used the information in summary-judgment briefing in the Bierstube case. Defense counsel argued that the parties had agreed, expressly or implicitly, to coordinate discovery and use the information in all three cases. The court found that the protective order had not actually been modified and that Smith had not agreed to the cross-case use of the documents.

Court’s Analysis

Under Federal Rule of Civil Procedure 37(b), a court may sanction a party for violating a discovery order, including a protective order. The court concluded that using the settlement information in both Golden China and Bierstube violated the protective order’s express limit on using confidential documents only in this case.

The court treated the initial Golden China filing differently from the later Bierstube filing. At the time of the initial filing, defense counsel’s belief that coordinated discovery had implicitly modified the protective order was reasonable, although incorrect. Smith’s counsel had not clearly treated the deposition testimony as limited to one case, and the parties had coordinated other discovery. After Smith objected, however, counsel could no longer reasonably believe that the parties had agreed to use the documents in all three cases. Counsel should have sought a formal modification of the protective order before filing the information in Bierstube.

The court found that Smith had not shown prejudice from either filing. The information was filed under seal in the other cases, Smith could argue that it was irrelevant in those cases, and Smith did not show harm to a legitimate privacy interest. The court also concluded that the settlement agreements did not contain confidentiality provisions and were not trade secrets or similar protected commercial information. It declined to award Smith his attorney’s fees because the initial violation was substantially justified, the later violation did not cause the fees incurred before that filing, and awarding fees would be unjust under the circumstances.

Disposition

The court ordered that Smith’s Motion to Enforce Protective Order and for Sanctions was GRANTED IN PART and DENIED IN PART. It was granted in part because defense counsel had to pay a $500 monetary fine to the court for violating the protective order through the Bierstube filing. It was denied in all other respects, including Smith’s requests for attorney’s fees, changes to the other cases’ summary-judgment filings, restrictions on continued use or sharing of the information, and a $20,000 fine.

The court also modified the protective order to allow use of the settlement information in the Golden China and Bierstube cases. The modification did not prevent the judges in those cases from deciding whether the information was relevant or admissible, and it did not allow use of the information in other litigation or sharing it with other clients or counsel. The court found that Bradley Pizza and Pamela M. Dahl themselves were not responsible for the alleged violations.