Securities and Exchange Commission v. Concord Management LLC

Background

The Securities and Exchange Commission sued Concord Management LLC and Michael Matlin. All parties, through counsel, requested a protective order under Federal Rule of Civil Procedure 26(c) covering nonpublic and competitively sensitive information that might be disclosed during discovery. The parties stipulated to the proposed terms, and the court found good cause for an appropriately limited order governing the pretrial phase of the case.

Confidential Information

The order defines “Discovery Material” as information of any kind produced or disclosed during discovery. A producing party may designate only the portions it reasonably and in good faith believes contain certain previously undisclosed information, including financial information, information about ownership or control of a nonpublic company, business plans, product-development or marketing information, personal or intimate information, or another category the court later protects.

The order establishes procedures for marking documents and deposition testimony as confidential. Deposition transcripts are treated as confidential for 30 days after the deposition, unless the producing party designates specific portions sooner or later follows the order’s procedures. A producing party may also correct an earlier failure to designate material before trial by notifying prior recipients in writing.

Who May Receive the Information

Confidential discovery material may be disclosed only to specified recipients, including the parties, certain insurers and their counsel, counsel retained for the case and their staff, outside vendors working on the case, mediators or arbitrators, document authors and addressees, certain potential witnesses, experts and other specialized advisers, deposition transcription staff, and the court and its personnel. Before receiving the material, mediators, arbitrators, potential witnesses, experts, and specialized advisers must receive the order and sign the required nondisclosure agreement. Counsel must retain those signed agreements and produce them at the times specified in the order.

Court Filings and Challenges

A party filing material under seal must also file a letter brief and supporting declaration justifying continued sealing on a particularized basis. The court retains discretion over whether to keep designated material confidential when it is submitted in connection with a motion or other proceeding. The order warns that material introduced at trial is unlikely to remain sealed. Confidential court submissions generally must include a public redacted filing and an unredacted version filed under seal.

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

Use, Privilege, and Return of Materials

Recipients may use confidential discovery material only to prosecute or defend this action and related appeals, not for business, commercial, competitive, or other litigation purposes. The order does not waive objections to discovery, privileges, or protections, and it does not decide whether evidence is admissible at trial. It also provides that an inadvertent disclosure of attorney-client privileged or attorney work-product material does not waive the protection. After notice of such a disclosure, the receiving party generally must return or destroy the material within five business days, although it may ask the court to require production.

Within 60 days after final disposition of the action, including appeals, recipients must return confidential material or destroy it if the producing party permits destruction, and certify that they kept no copies or summaries. Lawyers specifically retained for the case may keep archival copies of specified case materials, but those copies remain subject to the order. The order continues after the litigation ends, and the court retains jurisdiction to enforce it and impose contempt sanctions.

Ruling

Judge Philip M. Halpern ordered the stipulated confidentiality and protective order on March 27, 2024. The order applies to the parties and to other people covered by its terms who have actual or constructive notice, and violations may result in contempt.