Morling v. The Michaels Companies, Inc.

Background

The parties jointly requested a protective order under Federal Rule of Civil Procedure 26(c). The requested order governs nonpublic and competitively sensitive information that may be disclosed during discovery. The parties agreed to its terms through counsel, and the court found good cause for a tailored confidentiality order covering the pretrial phase of the case.

Confidentiality Rules

The order permits a producing party to designate portions of discovery material as “Confidential” when the party reasonably and in good faith believes the material includes nonpublic financial information, information about ownership or control of a nonpublic company, business or marketing plans, personal or intimate information, or sensitive or proprietary business information protected under Rule 26. The order also permits additional categories to receive confidential status through a later court order.

A producing party must mark protected material clearly. Deposition testimony may be designated during the deposition or within 30 days afterward. If a producing party accidentally fails to designate material, it may later provide written notice and replacement copies marked with the designation.

Permitted Disclosure and Use

People subject to the order may disclose confidential discovery material only to specified recipients and only as allowed by the order. These recipients include the parties and their insurers, counsel and necessary staff, outside vendors, mediators or arbitrators, certain people identified in documents, potential witnesses, experts and other specialized advisers, deposition stenographers, the court, and people approved by later written agreement or court order. Certain recipients must first receive the order and sign a nondisclosure agreement.

The order limits use of confidential discovery material to prosecuting and defending this case and any appeals. It does not restrict a party’s rights concerning that party’s own documents or information.

Court Filings, Challenges, and Privilege

A party filing confidential discovery material must publicly file a redacted version and submit the unredacted version under seal. A party seeking sealing must file an application and supporting declaration that specifically justify sealing. The order warns that the court may not keep material sealed when it is introduced at trial.

A party may object to a confidentiality designation before trial. The parties must try to resolve the dispute informally, and unresolved disputes may be presented to the court under the judge’s individual practices. Similar procedures apply to requests for additional restrictions, including attorney-only access in extraordinary circumstances.

The order states that producing privileged or work-product-protected material does not waive the privilege or protection. If such material is accidentally produced, the producing party may demand its return or destruction. The receiving party may challenge the claim by presenting the material to the court under seal within the specified five-business-day period.

Duration and Disposition

Within 60 days after final disposition of the action, including appeals, recipients generally must return or destroy confidential discovery material and certify that they have not retained copies or other reproductions. Attorneys specifically retained for the case may keep archival copies of certain litigation files and work product, but those copies remain subject to the order. The order survives the end of the litigation, and the court retains jurisdiction as needed to enforce it or impose contempt sanctions.

Ruling

Judge Vernon S. Broderick ordered the parties and other people with actual notice of the order to comply with its terms. The order is limited to discovery confidentiality and does not decide the merits of the underlying action, the ultimate confidentiality of any particular material, or the admissibility of evidence at trial.