Arthur Glick Truck Sales, Inc. v. Hyundai Motor America

Nature of the Order

The parties, through counsel, stipulated to a confidentiality agreement and asked the court to issue a protective order under Federal Rule of Civil Procedure 26(c). The court found good cause for an appropriately tailored order governing the pretrial phase of the action and ordered the parties and other covered persons to follow it. Violations may subject a person to contempt.

Confidential Information

The order covers discovery material designated as “Confidential.” A producing party may make that designation only for material it reasonably and in good faith believes contains previously undisclosed:

- Financial information, including profitability reports or estimates, fees, royalty rates, minimum guarantee payments, sales reports, and margins; - Information about ownership or control of a nonpublic company; - 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 requires confidential portions of ordinary discovery material to be clearly marked and requires the producing party to provide a version with the confidential information redacted for future public use. Deposition testimony and exhibits 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 later designate material that was previously produced without a confidentiality designation by notifying prior recipients in writing.

Permitted Disclosures and Use

Confidential discovery material may be disclosed only to specified recipients, including the parties and their insurers, counsel and litigation support staff, outside vendors working on the case, mediators or arbitrators, certain people identified in a document, possible witnesses, experts and specialized advisers, deposition stenographers, and the court and its personnel.

Before receiving confidential material, mediators or arbitrators, possible witnesses, experts, and specialized advisers must receive the order and sign the required nondisclosure agreement. Counsel must retain those agreements and produce them to opposing counsel either before the person testifies or at the end of the case, whichever comes first.

Recipients may use confidential discovery material only to prosecute or defend this action and related appeals. 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 Challenges

A party filing confidential material under seal must also file a letter brief and supporting declaration giving a particularized justification for continued sealing. The order states that the court retains discretion over whether to keep designated material confidential when it is submitted in connection with a motion or other proceeding. It also warns that material introduced at trial is unlikely to remain sealed.

When a filing contains confidential discovery material, the parties must publicly file a redacted version and file the unredacted version under seal, along with unredacted courtesy copies for the court and opposing counsel.

A party may object to a confidentiality designation before trial by giving written notice explaining the grounds. A party may also request additional disclosure limits, such as an attorneys’-eyes-only designation, by written notice. Unresolved disputes must be presented to the court under the court’s individual practices.

Privilege and Inadvertent Disclosure

The order states that an inadvertent disclosure of information protected by attorney-client privilege or the attorney work-product doctrine does not waive or forfeit that protection. After receiving a claim of inadvertent disclosure, the receiving party must return or destroy the material within five business days and provide counsel’s certification. The disclosing party must then provide a privilege log within five business days after notification that the material was returned or destroyed.

The receiving party may ask the court to compel production of the material, but the motion must be filed under seal and may not rely on the fact or circumstances of the inadvertent disclosure as a ground for relief. The disclosing party retains the burden of establishing that the material is privileged or protected.

End of the Case and Enforcement

Within 60 days after the final disposition of the action, including appeals, recipients must return or, with the producing party’s permission, destroy confidential discovery material and certify that they have not retained copies or other reproductions. Counsel specifically retained for the action may keep archival copies of specified case-related materials, but those copies remain subject to the order.

The order continues after the litigation ends. The court retains jurisdiction over persons subject to the order as necessary to enforce the order or impose contempt sanctions. Judge Philip M. Halpern signed the order for the United States District Court for the Southern District of New York.