City of Providence, Rhode Island v. Bats Global Markets, Inc.

Background

The parties jointly submitted a stipulated protective order under Federal Rule of Civil Procedure 26(c) and Federal Rule of Evidence 502(d). The order governs discovery in this action and any cases consolidated or coordinated with it. It is intended to protect trade secrets, proprietary business information, nonpublic communications with regulators, sensitive business and financial information, personally identifiable information, and other material that a producing party reasonably and in good faith believes should receive protection.

Confidentiality levels and permitted uses

The order creates two levels of protected material: “Confidential” and “Highly Confidential.” Highly Confidential treatment is reserved for current trade secrets or other information whose unauthorized disclosure is reasonably believed likely to cause imminent competitive, commercial, or financial harm. Protected material may be used only for prosecuting, defending, appealing, settling, or enforcing insurance rights concerning this action, and not for unrelated business purposes, investigations, proceedings, or potential claims not asserted in the Second Consolidated Amended Complaint.

Confidential material may generally be disclosed, when reasonably necessary for the action, to counsel, certain in-house personnel, approved experts and consultants, the court, mediators, court reporters, litigation-support vendors, certain witnesses, insurers’ relevant employees, persons agreed to in writing, or persons whose disclosure is compelled or required by law. Highly Confidential material may generally be disclosed to a narrower group, including outside counsel, approved experts and consultants, the court, mediators, court reporters, certain witnesses, and other specifically authorized recipients. Recipients must safeguard the material and may make copies only as reasonably necessary for the action.

Designation and challenge procedures

The producing party must mark or otherwise identify protected material as Confidential or Highly Confidential in the manner specified for documents, testimony, electronic material, tangible items, native-format documents, written discovery, and expert reports. A producing party may correct an inadvertent failure or mistake in designation, and a party may designate material produced by another party or nonparty when the order permits. Parties and nonparties may challenge a designation at any time consistent with the scheduling order, but they must first provide written notice and meet and confer. If the dispute is not resolved, the challenging party may seek relief from the court; the existing designation remains in place while the dispute is pending.

Sealing and public access

The court expressly stated that it had not reviewed the documents covered by the stipulation and therefore made no finding that any document was confidential. Whether a document is confidential will be decided, if necessary, through document-by-document review under the court’s rules and the presumption favoring public access to judicial documents. The court did not approve any provision that would allow the parties to file documents under seal without a prior court order. The order requires filings containing protected material to follow the Southern District of New York’s rules, including seeking permission to seal or redact when required and explaining why public access should not apply or is outweighed by other considerations.

Privileged material and final disposition

If privileged or otherwise protected material is produced inadvertently, the receiving party must follow the procedures in Federal Rule of Civil Procedure 26(b)(5)(B). The order also provides that inadvertent disclosure covered by Federal Rule of Evidence 502(d) does not waive the applicable privilege or protection. The parties may request the return or destruction of material subject to a privilege claim, while retaining limited copies to challenge that claim under the stated procedures.

After final termination of the action, receiving parties must continue to comply with the order’s restrictions. Unless an exception applies, they must make commercially reasonable efforts within 60 days to return or destroy protected material, subject to specified exceptions for legal requirements, backup systems, counsel’s work product, and certain case records. The order survives termination of the action, and the court retains jurisdiction to enforce it.

Ruling

Judge Jesse Furman entered the stipulated protective order, subject to the court’s limitations concerning confidentiality findings and sealing. The order governs the handling and use of protected discovery, but it does not itself determine that any document is confidential or authorize filing documents under seal without a separate court order.