Trireme Energy Holdings, Inc. v. Innogy Renewables US LLC

Background

Plaintiffs Trireme Energy Holdings, Inc. and Trireme Energy Development, LLC alleged that Innogy Renewables US LLC and certain affiliates intentionally delayed construction of the Cassadaga Project to avoid a milestone payment of almost $70 million that allegedly would have been due under the parties’ Merger Agreement. The underlying claims included breach of the Merger Agreement and breach of the implied duty of good faith and fair dealing.

This order addressed discovery, meaning the exchange of information and documents in the lawsuit. Plaintiffs asked the court to compel defendants to produce fully unredacted versions of 14 emails and other documents. The challenged redactions were made for confidentiality, relevance, or other non-privilege reasons rather than to protect information covered by a legal privilege.

The 14 emails included material concerning the circumstances under which Jeffrey Puterbaugh, Innogy’s former senior director of construction, left his employment in November 2020. Puterbaugh had managed the Cassadaga Project and was described as an important witness. Defendants also redacted information that they said generally concerned other Innogy projects in development.

Prior emergency request and arguments

Plaintiffs initially sought emergency production before the continued session of Puterbaugh’s deposition. After a February 18, 2022 telephonic conference, the court denied the application insofar as it sought emergency relief before that deposition and ordered additional briefing. The court later considered the underlying request to compel production.

Defendants argued that plaintiffs had waited too long, that information about Puterbaugh’s departure was confidential and irrelevant, and that plaintiffs appeared motivated by a desire to embarrass him. Defendants also argued that plaintiffs could not be trusted to follow the existing stipulated confidentiality agreement and protective order because confidential materials had previously been filed on the public docket.

Regarding documents about other projects, defendants argued that disclosure posed a real and pressing competitive risk because Trireme’s principal, James Spencer, was allegedly an active renewable-energy developer competing with Innogy’s successor. Plaintiffs denied that Spencer was a competitor and described him as the managing partner of an asset-management platform.

Court’s analysis

The court applied the general rule that a party may not unilaterally redact information from documents that are responsive and relevant to discovery based only on its own determination that the information is irrelevant. The court explained that confidentiality and business-sensitivity concerns ordinarily do not justify such redactions when a protective order is available to restrict the information’s use.

For the Puterbaugh-related emails, the court concluded that material concerning the circumstances or terms of his departure was relevant at least to potential bias or prejudice involving a key witness. Although information such as severance pay, bonus pay, and negotiations over a separation agreement could be highly sensitive, the court found that the existing protective order provided sufficient protection against inadvertent disclosure.

For the other redacted documents, the court found that defendants had made a weaker showing than the party that obtained protection in a cited case involving a non-party competitor. Defendants did not claim that Spencer competed with them on the specific projects discussed in the redacted material, and neither side supported its position with evidence. Because defendants bore the burden of showing good cause for protection, the court applied the rule that relevance-based redactions are improper. The court noted that defendants could negotiate, and if necessary seek an order authorizing, an attorneys’-eyes-only arrangement for information about other renewable-energy projects.

The court also found that plaintiffs should have filed their request earlier, but determined that losing the opportunity to use the unredacted documents at the Puterbaugh deposition was a sufficient penalty for that delay. The court warned plaintiffs that any further violations of the protective order would be sanctionable.

Ruling

The court granted plaintiffs’ letter-application to the extent that defendants were required, within 14 days of the order, to remove all redactions made for reasons other than privilege from documents produced in discovery and reproduce the affected documents in unredacted form, or with only privilege redactions where applicable. The order did not prevent defendants from making redactions required by Federal Rule of Civil Procedure 5.2(a). Judge Barbara Moses entered the order on March 3, 2022.