CCM Touring LLC v. Moonbug Entertainment LTD

Background

The parties jointly submitted a proposed confidentiality stipulation and protective order. They represented that discovery could include trade secrets, sensitive competitive information, commercially sensitive data, confidential financial and business information, strategic plans, and information concerning the marketing, sale, and distribution of copyright-protected works. The order was entered under Federal Rule of Civil Procedure 26(c), which permits courts to protect information exchanged in discovery for good cause.

Confidentiality Designations

The order permits a party or nonparty producing discovery to designate documents, deposition testimony, interrogatory answers, requests for admission, and other discovery information as CONFIDENTIAL when it contains trade secrets, financial, technical, business, sensitive, or proprietary information. A producing party may designate information as HIGHLY CONFIDENTIAL when disclosure to a receiving party’s director, officer, or employee could cause competitive harm. Examples include competitively sensitive financial data, agreements, business plans, and marketing plans.

Information is excluded from these designations if it is public when disclosed, later becomes public through no act or failure to act by the receiving party, was independently developed by the receiving party, or was later received from a third party entitled to disclose it. The order provides procedures for labeling documents, correcting inadvertent omissions, and designating deposition testimony either on the record or within 14 days after the deponent or counsel receives the transcript. Pending that 14-day period, deposition transcripts are generally treated as CONFIDENTIAL unless otherwise designated.

Permitted Uses and Disclosures

Protected material may be used only to conduct the action. CONFIDENTIAL material may be disclosed to specified recipients, including counsel, legal-support personnel, litigation-service providers, qualifying experts and consultants, certain people who previously had authorized access, necessary current personnel of the receiving party, the court, jurors, mediators, and other people agreed to by the parties or permitted by the court. Many recipients must first sign the order’s confidentiality agreement.

HIGHLY CONFIDENTIAL material is subject to narrower access. It may be disclosed to outside counsel, specified litigation-service providers, qualifying experts and consultants, certain prior authorized recipients, the court, jurors, mediators, and other approved people. Each receiving party may provide it to no more than four in-house counsel at a time, subject to the order’s replacement provision. Before disclosure, the receiving party generally must notify permitted recipients of the information’s confidential nature and obtain required confidentiality agreements.

Handling, Challenges, and Court Filings

The order requires recipients to store protected information securely and use reasonable precautions against loss, misuse, unauthorized access, disclosure, alteration, or destruction. If protected information is disclosed without authorization, the receiving party must notify the designating party, use best efforts to retrieve copies, and inform identifiable recipients of the order’s requirements.

Inadvertent production without a designation does not waive the producing party’s right to designate the material later, provided the party promptly takes corrective steps. Parties may challenge designations after a good-faith meet-and-confer process, but the designations remain effective unless successfully challenged. A party using protected material in a court filing must follow Judge Vernon S. Broderick’s individual filing rules and applicable law governing sealing and public access. The order also provides that inadvertent production of privileged or work-product-protected material does not waive the protection under Federal Rule of Evidence 502.

Duration and Enforcement

The restrictions continue until further order of the court and do not automatically end when appeals are completed. After completion of appeals from the final judgment, and upon written request from the producing party, protected materials generally must be returned or destroyed within 60 days, although outside counsel may retain certain archival materials subject to the order.

The order binds the parties and their parents, subsidiaries, affiliates, attorneys, agents, and assigns. A person who violates it may, in the court’s discretion, face injunctive relief and liability for consequential damages and other reasonable expenses, including attorneys’ fees. The order also establishes procedures when a recipient receives a subpoena or production request for protected material, and it permits the designating party to remove a document or information from protection by notifying opposing counsel.

Ruling

The court ordered that the stipulated protective-order provisions govern confidentiality in the action. The order did not determine the merits of CCM Touring LLC’s or Moonbug Entertainment LTD’s underlying claims, and it did not establish that protected information is relevant or admissible.