Accent Delight International Ltd. v. Sotheby's

Background

The court entered an amended protective order in the lawsuit brought by Accent Delight International Ltd. and Xitrans Finance Ltd. against Sotheby’s and Sotheby’s, Inc. The order incorporated materials connected to two earlier applications under 28 U.S.C. § 1782, a federal law allowing a court to authorize evidence gathering for use in proceedings outside the United States. The first application involved proceedings in France, Monaco, and Singapore. The second involved foreign criminal proceedings in Monaco and Switzerland.

The order states that documents produced in response to the first application had been treated as produced in this lawsuit. It also states that the court granted the second application in part, that its decision was affirmed on appeal, and that documents and employee deposition testimony produced in this lawsuit were treated as a complete response by Sotheby’s, Inc. to the second application and related subpoenas or deposition notices.

Protection Levels and Permitted Access

The order allows a party or third party to label discovery material as either “Confidential Material” or “Attorneys’ Eyes Only Material.” Confidential material may include information covered by a confidentiality agreement, trade secrets, proprietary or competitively sensitive business information, and certain private personal information. Attorneys’-eyes-only material may include information covered by the court’s January 2, 2020 order and highly confidential business information whose disclosure to a broader group would, in the designating person’s good-faith judgment, harm that person’s business or a customer’s or client’s business.

Confidential material may generally be disclosed to the parties, their counsel and counsel’s employees, certain necessary party employees, the court, court-appointed mediators or experts, court reporters, document-processing vendors, qualified consultants and experts who sign the required agreement, and certain witnesses. Attorneys’-eyes-only material is limited more strictly, generally to counsel, the court, specified professionals and vendors, qualified consultants and experts, and certain witnesses. Other disclosures require written consent or a court order.

Protected material may be used only for prosecuting or defending this lawsuit and related appeals, subject to specified exceptions. The order preserves the parties’ rights to use the previously produced materials consistently with the earlier protective orders. It also permits the second group of materials to be used consistently with the second protective order, while requiring any attorneys’-eyes-only designation in this lawsuit to receive the same protection in the foreign criminal proceedings.

Challenges, Disclosure, and Disposition

A party challenging a confidentiality designation must act promptly and first confer with the designating person’s counsel. If the dispute remains unresolved, the designating person may file a motion explaining the basis for the designation. Until the court rules, the material keeps its designation. The order directs that any filing seeking continued secrecy must follow the court’s procedures and account for the presumption favoring public access to judicial documents.

An accidental failure to apply a designation does not by itself waive protection. If a designation error is discovered, the designating person must promptly correct it, and receiving parties must return or destroy improperly designated copies. The order also requires a receiving party that makes an unauthorized disclosure to notify the designating person, try to recover the material, inform the recipient of the order, and seek the recipient’s agreement to follow it.

The order describes procedures for responding to subpoenas and other legal process seeking protected material. It requires notice to the designating person and generally delays production for fourteen days unless the legal process requires an earlier response. After the lawsuit ends, receiving parties generally must return the protected material within sixty days and certify that they kept no copies, although counsel may retain archival copies of specified case materials subject to the order.

Court’s Action and Limits of the Order

Judge Jesse M. Furman entered the amended protective order. The order states that the court had not reviewed the documents covered by the designations and therefore made no finding that any document was confidential. Any such determination would be made through a document-by-document process, subject to the presumption favoring public access to judicial documents. The order also does not authorize filing documents under seal without a separate court order. This was a discovery and confidentiality order, not a decision on the merits of the parties’ underlying dispute.