Nahtomy v. FluidFreeRide LLC

Background

Nadav Nahtomy sued FluidFreeRide LLC and Leitmotif Services LLC, doing business as FluidFreeRide LLC. The parties, through counsel, jointly requested a protective order under Federal Rule of Civil Procedure 26(c) for confidential material exchanged during discovery. The court found good cause for an appropriately limited order based on the parties’ representations that discovery would involve confidential documents or information whose disclosure could cause harm to the producing person or a third party owed a duty of confidentiality.

What the Order Covers

The order defines “Discovery Material” as information produced or disclosed during discovery in the action. A producing person may designate material as confidential only when its public disclosure is restricted by law or would harm business, commercial, financial, or personal interests. Listed categories include previously undisclosed financial information; information about ownership or control of a nonpublic company; business, product-development, or marketing plans; personal or intimate information; and other categories later given confidential status by the court.

The producing person or counsel must clearly mark protected portions as “Confidential” and provide a version with confidential information redacted for future public use. Deposition testimony may be designated during the deposition or within 30 days afterward by identifying specific pages, lines, or exhibits. During that 30-day period, the entire deposition transcript is treated as confidential. Material previously produced without a confidentiality designation may be designated later, before trial, by written notice to prior recipients.

Disclosure and Use Limits

Recipients generally may not disclose confidential discovery material except to the people identified in the order. Those people include the parties and their insurers; counsel and litigation staff; outside litigation vendors; mediators or arbitrators; document authors and addressees; potential witnesses; experts and other specialized advisers; deposition transcription personnel; and the court and its personnel. Witnesses, experts, mediators, and arbitrators must first receive the order and sign a nondisclosure agreement. Counsel must retain those agreements and produce them at the time specified by the order.

Confidential material may be used only to prosecute or defend this action and any appeals. It may not be used for a business, commercial, or competitive purpose. The order does not restrict a person’s rights concerning that person’s own documents or information, or concerning information obtained independently of discovery.

Challenges, Sealing, and Compulsory Process

A party may object to a confidentiality designation before trial by giving written notice stating the specific grounds. If the parties cannot resolve the dispute, counsel must bring it to the court under the court’s individual practices. A party may also request additional disclosure limits, including an “attorneys’ eyes only” restriction in extraordinary circumstances, using the same process.

The order does not itself authorize filing confidential material under seal. Except for redactions allowed by the district’s electronic-filing privacy policy, a party seeking to file material under seal or in redacted form must file a redacted copy and separately provide an unredacted copy to the court. The parties must then confer about whether the redactions can be removed. If they cannot agree, the party seeking continued confidentiality must make a specific request to the court addressing the governing appellate decisions and proposing redactions; an opposing party may respond.

The order also addresses material subject to a third party’s confidentiality obligations. The party receiving a discovery request must notify the third party within two business days. If no protective-order request or other relief is sought within 21 days after that notice, the receiving party must produce responsive information, subject to an appropriate confidentiality designation.

Security, Duration, and Disposition

People with access to confidential material must take precautions against unauthorized or accidental disclosure. Personally identifying information, including examples such as Social Security numbers, financial account numbers, passwords, and information that could be used for identity theft, must be kept secure and confidential. A recipient experiencing a data breach must immediately notify the producing person and cooperate in addressing the breach.

The order survives the end of the litigation. Within 30 days after final disposition, confidential discovery material and copies must be returned to the producing person or destroyed if the producing person permits destruction. The court retains jurisdiction to enforce the order and impose contempt sanctions for willful violations. The court approved the parties’ stipulated protective order; the opinion does not decide the underlying claims.