Horowitz v. Spark Energy, Inc.

Background

All parties, through their lawyers, asked the court to enter a protective order under Federal Rule of Civil Procedure 26(c). They sought protection for nonpublic and competitively sensitive information that might be disclosed during discovery. The parties agreed to the order's terms, and the court found good cause for an appropriately limited confidentiality order covering the pretrial phase.

Confidential information

The order allows a producing party to mark only material that it reasonably and honestly believes includes specified confidential information, such as previously undisclosed financial information, ownership or control information concerning a private company, business or marketing plans, or personal or intimate information. A producing party may also designate information as confidential if the court later gives that category confidential status.

People covered by the order generally may not disclose designated confidential discovery material except as the order permits. Permitted recipients include the parties and certain insurers, litigation counsel and their staff, outside service providers, mediators or arbitrators who sign a nondisclosure agreement, certain authors or recipients of documents, potential witnesses who sign such an agreement, experts and specialized advisers who sign such an agreement, deposition stenographers, and the court.

The order also permits disclosure to the named plaintiffs and their counsel in two other identified proceedings. It creates a higher protection level called “Highly Confidential/Attorneys’ Eyes Only” for information whose disclosure to the opposing party, rather than that party’s counsel, could cause serious injury or harm. Under the order, that material may be disclosed only to counsel of record for the named plaintiffs in those two proceedings.

Court filings and challenges

A party filing confidential material under seal must publicly file a redacted version and submit an unredacted version under seal, along with a letter brief and supporting declaration explaining specifically why continued sealing is justified. The court retains discretion over whether to keep designated material confidential when it is submitted in connection with a motion or other proceeding. The order warns that the court is unlikely to seal material introduced as evidence at trial.

A party may object to a confidentiality designation before trial by giving written notice stating the specific grounds. If the parties cannot promptly resolve the dispute, they must bring it to the court under the judge’s individual practices. The order does not waive discovery objections or privileges and does not decide whether any evidence is admissible at trial.

Use, return, and enforcement

Recipients may use confidential discovery material only to prosecute or defend this action and related appeals, not for business, commercial, competitive, or other litigation purposes. The order addresses disclosures required by subpoenas or other legal process, requires recipients to take precautions against unauthorized or accidental disclosure, and generally requires protected material to be returned or destroyed within 60 days after final disposition, including appeals. Litigation counsel may retain certain archival materials, which remain subject to the order.

Ruling

Judge Paul G. Gardephe ordered the stipulated confidentiality and protective order. The order remains binding after the litigation ends, and the court retains jurisdiction over covered persons as necessary to enforce the order or impose contempt sanctions.