Stinson v. Houslanger & Associates PLLC

Background

The court reviewed letter motions from Demi, LLC doing business as Demi of New York, and from Houslanger & Associates, PPC, Todd Houslanger, Matthew Blake, and Bryan Bryks. The defendants requested a discovery conference concerning confidentiality designations for documents produced during discovery. Plaintiff Barbara Stinson opposed the requests. The court also reviewed documents submitted for private review by the judge.

The dispute concerned documents produced under a July 19, 2019 agreed protective order and confidentiality agreement. The documents produced by Demi consisted of a June 2005 Purchase and Sale Agreement and an April 2005 Servicing Agreement. The opinion states that Stinson’s debt was purchased by Demi as part of a portfolio or pool of debt. The documents produced by the Houslanger Defendants consisted of Houslanger PPC’s internal work procedures.

Legal Standard

Under Federal Rule of Civil Procedure 26(c), a court may issue a protective order when a party shows good cause to protect information from annoyance, embarrassment, oppression, or undue burden or expense. The party seeking protection must show that the information is confidential and that good cause exists through specific facts, rather than general statements. The court considered factors including how widely the information was known, the steps taken to keep it secret, and its value to the business and competitors.

Demi Documents

The court rejected Stinson’s argument that confidentiality would prevent her from using the documents in a summary-judgment motion. The protective order allowed confidential documents to be used in motions, subject to the court’s procedures for requesting that material remain under seal. The court also rejected the argument that documents should not be confidential merely because they were important or directly relevant to the case.

The court found that Demi had shown good cause to continue treating the Purchase and Sale Agreement and Servicing Agreement as confidential. The agreements had confidentiality provisions or statements limiting distribution. Although the agreements were 15 years old and some parties to them no longer existed, the court did not reject Demi’s assertion that disclosure could harm its competitive position. The court also held that testimony by defendant Blake about the Servicing Agreement did not, by itself, waive the agreement’s confidentiality.

The court separately found Demi’s redactions improper because Demi had not provided a legal basis for several redactions, including redactions of third-party information and entire paragraphs. The court directed Demi to produce DEMI 000017-42 without redactions. The court noted that the protective order already restricted use of the documents to the prosecution or defense of the action and that Stinson was not a competitor who would gain a competitive advantage from seeing the agreement terms.

Houslanger Documents

The court found that the Houslanger Documents were also properly designated confidential. Houslanger employees signed confidentiality agreements covering this type of information and were required to return the documents when leaving the firm. Houslanger PPC also took steps to protect the documents. The court accepted the defendants’ position that the documents described procedures and strategies used in their debt-collection practice and that disclosure could weaken Houslanger PPC’s competitive advantage.

Disposition

Defendants’ motions for a discovery conference, ECF 136 and 137, were denied as moot. The defendants had shown good cause to continue the confidentiality designations for DEMI 000017-42 and H&A 000218-227. Demi was directed to produce DEMI 000017-42 to Stinson without redactions within 14 days of the order. The parties were each required to bear their own costs on these motions, although the court warned that future discovery failures or frivolous discovery motions could lead to an allocation of costs. The clerk was directed to close ECF 136 and 137.