Belchikov v. XTP Implementation Services, Inc.

Background

The parties, through counsel, jointly requested a confidentiality and 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. Judge Philip M. Halpern found good cause for an appropriately tailored order governing the pretrial phase of the action.

Confidentiality designations

The order defines “Discovery Material” as information of any kind produced or disclosed during discovery. A producing party may designate material as “Confidential” only when it reasonably and in good faith believes the material includes:

- Previously undisclosed financial information, such as profitability reports or estimates, percentage fees, design fees, royalty rates, minimum guarantee payments, sales reports, or sales margins; - Previously undisclosed information about ownership or control of a nonpublic company; - Previously undisclosed business plans, product-development information, or marketing plans; - Personal or intimate information about an individual; or - Another category that the court later gives confidential status.

The order provides procedures for marking confidential material and producing redacted copies for public use. Deposition testimony may be designated during the deposition or within 30 days afterward. During that 30-day period, the entire deposition transcript must be treated as confidential. A producing party may also correct an earlier failure to designate material before trial by giving written notice to prior recipients.

Permitted disclosures and use

Confidential material may be disclosed only to categories of people listed in the order, including the parties, their insurers and insurer counsel, counsel retained for the case and their staff, outside vendors, mediators or arbitrators, certain people identified on a document, potential witnesses, experts and specialized advisers, deposition stenographers, and the court and its personnel. Witnesses, experts, mediators, and arbitrators generally must first receive the order and sign the required nondisclosure agreement.

Recipients may use confidential material only to prosecute or defend this action and appeals from it. They may not use it for business, commercial, competitive, or unrelated litigation purposes. The order does not restrict a party’s rights concerning its own documents or information.

Court filings and disputes

A party filing material under seal must also file a letter brief and supporting declaration explaining, on a particularized basis, why continued sealing is justified. The order states that the court may unseal documents if it cannot make the specific findings required to justify closure. The court retains discretion over whether to give confidential treatment to material submitted in connection with a motion or other proceeding, and warns that material introduced at trial is unlikely to remain sealed.

Confidential court submissions must include a publicly filed redacted version, an unredacted version filed under seal, and unredacted courtesy copies for the court and opposing counsel. A party may object to a confidentiality designation or request additional limits on disclosure, such as attorneys’-eyes-only treatment in extraordinary circumstances. If the parties cannot promptly resolve the dispute, counsel must bring it to the court under the judge’s individual practices.

Privilege and conclusion of the case

If privileged or attorney-work-product material is inadvertently disclosed, the disclosure does not waive the protection. After receiving notice, the recipient must return or destroy the material within five business days and provide a certification. The disclosing party must then provide a privilege log within five business days. The recipient may ask the court to compel production, and the disclosing party retains the burden of proving that the material is privileged or protected.

Within 60 days after final disposition of the action, including appeals, recipients must return or, with the producing party’s permission, destroy confidential material and certify that they have kept no copies or other reproductions. Counsel specifically retained for the action may keep an archival copy of specified case files and attorney work product, but those copies remain subject to the order. The order survives termination of the litigation, and the court retains jurisdiction to enforce it and impose contempt sanctions. Judge Halpern entered the stipulated order on June 6, 2022.