Schroder's Complete Auto Care, Inc. v. Aclara Smart Grid Solutions, LLC

Background

The parties, through counsel, jointly requested a protective order under Federal Rule of Civil Procedure 26(c). They represented that discovery would involve confidential documents or information whose public disclosure could harm the person producing it or a third party owed confidentiality. The court found good cause for a tailored order governing the pretrial phase of the case.

Main provisions

The order defines “Discovery Material” as information produced or disclosed during discovery. A producing person may designate material “Confidential” only when its public disclosure is restricted by law or would harm business, commercial, financial, or personal interests. Examples include previously undisclosed financial information, information about ownership or control of a nonpublic company, business or marketing plans, product-development information, and personal or intimate information.

People receiving confidential discovery generally may not disclose it except as the order permits. Permitted recipients include the parties, insurers and their counsel, counsel and litigation-support personnel, mediators or arbitrators, certain people identified in documents, potential witnesses, experts and consultants, deposition stenographers, and the court and its personnel. Certain recipients must first sign a nondisclosure agreement.

The order allows a party to object to a confidentiality designation or request additional disclosure limits, such as “attorneys’ eyes only.” If the parties cannot resolve the issue, they must present the dispute to the court under the applicable individual rules. The order also provides a process for responding to discovery requests involving information subject to a third party’s confidentiality obligations.

Court filings, privilege, and personal information

The order states that confidential discovery may be used only to prosecute or defend this action and related appeals, not for business, competitive, or unrelated litigation purposes. It does not create a right to file information under seal. A party seeking to file confidential material must file a letter-motion explaining the basis for sealing and must publicly file a redacted version while filing the unredacted version under seal as required. The court retains discretion over whether to treat designated material as confidential when submitted in connection with a motion or other proceeding.

The order protects against waiver when privileged or attorney-work-product material is inadvertently disclosed. After a claim of inadvertent disclosure, the receiving party generally must return or destroy the material within five business days and provide a certification. The disclosing party must then provide a privilege log, and the receiving party may ask the court to compel production. The disclosing party retains the burden of establishing the material’s privileged or protected status.

Personally identifying information exchanged in discovery must be kept secure and confidential. A recipient experiencing a data breach must immediately notify the producing person and cooperate in addressing the breach.

Ruling and effect

Judge Jennifer H. Rearden ordered the parties and other people subject to the order to follow these requirements. The order continues after the litigation ends. Within 30 days after final disposition, confidential discovery and copies must be returned or, with the producing person’s permission, destroyed, with a written certification. Counsel may retain archival copies of specified case and work-product materials, which remain subject to the order. The court retains jurisdiction to enforce the order and impose contempt sanctions for willful violations. The order does not decide the merits of the parties’ dispute.