UMG Recordings, Inc. v. OpenDeal Inc.

Background

UMG Recordings, Inc. sued OpenDeal Inc. d/b/a Republic. The parties, through their attorneys, jointly requested a protective order under Federal Rule of Civil Procedure 26(c) for nonpublic and competitively sensitive information that could be disclosed during discovery. The court found good cause and concluded that the proposed order was appropriately tailored to the pretrial phase of the case.

What the order does

The order permits a party or third party producing discovery to designate material as “Confidential” when counsel determines in good faith that protection is necessary for confidential or proprietary information. It identifies examples such as previously nonpublic financial information, ownership or control information, business plans, investment opportunities, product-development information, marketing plans, and private or intimate information. Publicly available or previously disclosed information may not be designated confidential under the order.

Confidential material may be used only to prosecute or defend this case and related appeals. The order limits disclosure to specified categories, including the parties and participating personnel, attorneys and litigation-support staff, vendors, mediators, certain witnesses, experts, stenographers, and the court. Some recipients must first sign a nondisclosure agreement.

The order creates a more restrictive “Highly Confidential” designation for extraordinary circumstances involving trade secrets or other highly sensitive, nonpublic information whose disclosure could cause substantial commercial or competitive harm. Highly Confidential material may be disclosed only to the narrower categories listed in the order, and disclosure to certain witnesses for the receiving party requires either the producing party’s written agreement or a court order, along with a signed nondisclosure agreement.

The order also establishes procedures for correcting inadvertent confidentiality or privilege designations, including requirements to stop using inadvertently produced privileged material and return or destroy it within five business days after notice. It preserves objections to discovery requests, privilege protections, and arguments about the admissibility of evidence. Parties may challenge confidentiality designations and must follow the court’s procedures for filing protected material under seal.

Within 60 days after final disposition of the case, including exhaustion of appeals, recipients generally must return or destroy confidential and highly confidential material and certify that they have not retained copies or reproductions. Outside counsel may keep certain archival litigation files, but those files remain subject to the order. The protective order survives termination of the case, and the court retains jurisdiction to enforce it during the litigation.

Disposition and effect

The court entered the stipulated confidentiality agreement and protective order. It applies to the parties, their specified corporate affiliates and personnel, attorneys, representatives, agents, experts, consultants, third parties providing discovery, and other persons with notice who agree to be bound. The order governs discovery and confidentiality only; the opinion does not resolve the merits of UMG Recordings, Inc.’s claims or OpenDeal Inc.’s defenses.