Taggart v. Source Digital, Inc.

Background

The parties, through counsel, jointly stipulated to and requested a 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. The court found good cause for issuing an appropriately tailored confidentiality order governing the pretrial phase of the action.

Protective-order terms

The order defines “Discovery Material” as information produced or disclosed during discovery. A producing party may designate specific material as “Confidential” when it reasonably and in good faith believes the material includes previously undisclosed financial information, ownership or control information concerning a nonpublic company, business or marketing plans, personal or intimate information, or sensitive proprietary financial, technical, marketing, commercial, or other business information protected under Rule 26.

Material designated “Highly Confidential—Attorney’s Eyes Only” receives more restrictive treatment. Confidential material may be disclosed only to specified people, including the parties when needed for the action, counsel and necessary staff, litigation service providers, certain mediators, authors or recipients of documents, qualified witnesses and experts who sign nondisclosure agreements, court personnel, and other people authorized by the court or agreed to in writing. People receiving material in several of these categories must receive a copy of the order and sign the required nondisclosure agreement.

The order requires confidentiality designations to be limited to material that qualifies for protection and prohibits mass or routine designations. It allows a producing party to correct an inadvertent failure to designate material, and it allows any party to challenge a designation. The parties must try to resolve such disputes before asking the court to decide them, and the material remains protected at its existing level while a challenge is pending.

Confidential material may be used only to prosecute or defend this action and related appeals. The order also sets procedures for responding to subpoenas, protects against waiver when privileged or work-product-protected material is inadvertently produced, and requires recipients generally to return or destroy confidential material within 60 days after final disposition of the action, including appeals. Counsel specifically retained for the action may keep certain archival litigation files, which remain subject to the order.

Court filings and enforcement

A party seeking to file confidential discovery material under seal must publicly file a redacted version, submit the unredacted version under seal, and provide a particularized application and supporting declaration. The order warns that the court is unlikely to seal material introduced at trial merely because it was previously designated as confidential.

The order states that the court made no finding that any particular discovery material is confidential and retains discretion over whether to grant confidential treatment. It remains binding after the litigation ends, and the court retains jurisdiction to enforce the order and impose sanctions for contempt.

Ruling

Judge Alvin K. Hellerstein ordered the parties and other persons subject to the order to follow its confidentiality, disclosure, use, return-or-destruction, and enforcement provisions. The opinion does not decide the merits of the underlying dispute or determine that any particular discovery material is confidential.