Chartwell RX, LLC v. Inmar, Inc.

Background

The parties submitted a proposed stipulated protective order under Federal Rule of Civil Procedure 26(c) to govern discovery in this civil action. The order allows a party or nonparty producing discovery to designate materials as “Confidential,” “Highly Confidential,” or “Outside Counsel Only.”

Confidentiality levels and permitted recipients

“Confidential” materials may be disclosed to the court, counsel and their staff, certain in-house attorneys, parties and assisting employees when reasonably necessary for case preparation, experts and consultants, witnesses when necessary, court reporters, certain litigation vendors, and persons reasonably believed to have authored or received a document.

“Highly Confidential” materials may be disclosed to the categories generally allowed to receive “Confidential” materials, except parties and assisting employees and people called to testify. “Outside Counsel Only” materials may not be disclosed to in-house counsel, parties and assisting employees, or people called to testify. The producing party may consent to additional disclosures.

Experts and consultants must be identified to the other parties, who have five days to object before disclosure. Certain recipients must sign a nondisclosure agreement and agree to the protective order and the court’s jurisdiction to enforce it.

Designating and challenging materials

The order permits designations for trade secrets, nonpublic confidential or proprietary information, commercially sensitive information, and especially sensitive information whose disclosure could harm legitimate business interests or competitive advantage. It requires designating parties to consider whether information is public, has been shared without confidentiality restrictions, was not maintained confidentially, is available from another source, or is old.

The order specifies how designations must be placed on paper documents, electronically stored information, discovery requests and responses, and deposition testimony. An inadvertent failure to mark material does not waive the designation if the producing party later provides notice. The receiving party generally must return or destroy previously unmarked copies within five days after receiving substitute copies, while retaining the right to challenge the designation.

A party challenging a designation must notify the designating party in writing and allow ten days for a response. If the designation is not changed after good-faith discussions, it remains effective unless the court changes it on motion. The order also allows a party to seek modification for good cause.

Privilege and court filings

When a party withholds material based on attorney-client privilege or work-product protection, it generally must provide a privilege log within fourteen days, unless an exception or different deadline applies. The log must identify information such as the document type, date, authors and recipients, general subject matter, and basis for the privilege. Some post-lawsuit communications with counsel and post-lawsuit work product do not have to be listed.

If privileged material is inadvertently produced, the producing party may notify the receiving party and identify the material and the basis for withholding it. The receiving party must return, sequester, or destroy the material and stop using or sharing it unless it contests the privilege claim. A challenge must be made within five business days, and the producing party may then move within ten business days for an order declaring the material privileged. The producing party retains the burden of proving privilege.

Confidential material included in a court filing must be handled under the court’s sealing procedures. A party may not file material under seal without a further court order addressing the specific material. A motion to seal must include the required supporting papers, and a redacted public version must be filed. The order directs the parties to minimize sealed material and exclude confidential information unless it is directly relevant.

Use and disposition of materials

Materials covered by the order may be used only for this civil action, including preparing for and conducting trial, subject to stated exceptions for information that becomes public or is available from another source without confidentiality obligations. Confidential materials generally must remain in counsel’s possession except when disclosure is permitted by the order.

Within sixty days after the action concludes, and upon the designating party’s request, the receiving party must either return covered materials or destroy them and provide written certification. The court retains jurisdiction over persons bound by the order for as long as necessary to enforce its terms. Requests to seal materials in another court, including on appeal, must comply with that court’s rules.

Ruling

Judge Castel approved the stipulated protective order on October 13, 2022. The order expressly states that the approval was intended to reduce discovery problems and facilitate discovery; it does not decide whether any particular document or information is entitled to protection under Rule 26(c).