Verragio, LTD. v. H.J. Namdar Diamonds

Background

Verragio, LTD. and H.J. Namdar Diamonds, through their counsel, agreed to a confidentiality agreement and asked the court to issue a protective order under Federal Rule of Civil Procedure 26(c). They sought protection for nonpublic and competitively sensitive information that could be disclosed during discovery. The court found good cause for an appropriately tailored order governing the pretrial phase of the case.

Order's Terms

The order applies to the parties, their officers, agents, employees, attorneys, and other people who receive actual notice of it. It covers discovery materials designated as confidential. A producing party may designate only material that it reasonably and in good faith believes includes previously undisclosed financial information, ownership or control information concerning a nonpublic company, business or marketing plans, personal or intimate information, or another category later given confidential status by the court.

Confidential discovery materials may be disclosed only to specified people, including the parties, counsel, insurers and their counsel, litigation vendors, mediators or arbitrators, certain document recipients, potential witnesses, experts, deposition transcription staff, and the court. Mediators, witnesses, experts, and other specified recipients must first receive the order and sign a nondisclosure agreement. Confidential materials may be used only to prosecute or defend this action and related appeals.

The order establishes procedures for designating deposition testimony, correcting an earlier failure to designate material, objecting to a confidentiality designation, and requesting additional restrictions such as attorneys' eyes only. It does not waive objections to discovery, privileges, or protections, and it does not decide whether evidence is admissible at trial.

The court did not make a finding that any particular discovery material was actually confidential. It retained discretion to decide whether to provide confidential treatment and stated that materials introduced at trial were unlikely to remain sealed merely because they had previously been designated confidential. No document may be filed under seal without a further court order addressing the specific material. The order also preserves the parties' ability to comply with subpoenas or other legally required disclosures, subject to notice requirements.

Ruling and Effect

Judge P. Kevin Castel entered the parties' stipulated confidentiality agreement and protective order. People with access to confidential discovery must take precautions against unauthorized or accidental disclosure. Within 60 days after the final disposition of the action, including appeals, recipients generally must return or destroy the confidential materials, although counsel may retain an archival copy subject to the order. The order survives the end of the litigation, and the court retains jurisdiction to enforce it or impose contempt sanctions.