Travel Leaders Group Holdings, LLC v. Thomas

Background

The court considered the parties’ joint letter about the scope of a proposed protective order. The parties agreed that plaintiffs’ in-house counsel, Ms. Daras, could access discovery designated as non-confidential and confidential. They disputed whether she should also access discovery designated as “highly confidential.”

Ms. Daras is General Counsel for Internova Travel Group and a member of the New York Bar. The opinion states that she oversees all legal matters across Internova and that plaintiffs represented she does not manage business functions or participate in strategy concerning pricing, markets, or customers. Plaintiffs proposed limiting highly confidential access to Ms. Daras, or any successor to her role, as the only member of Internova’s in-house counsel with that access.

Legal standard

Federal Rule of Civil Procedure 26(c)(1)(G) permits a court, for good cause, to restrict disclosure of trade secrets and other confidential commercial information. The court explained that in-house counsel cannot be denied access solely because they work in-house, but access also cannot be allowed solely because counsel is bound by professional-responsibility rules.

Instead, courts use an individualized two-step analysis. First, the court examines whether the in-house lawyer participates in “competitive decisionmaking,” meaning activities involving advice or participation in business decisions made in light of comparable information about a competitor. This inquiry addresses the risk of accidental disclosure. Second, the court balances that risk against the requesting party’s need for the information.

Court’s analysis

The defendant argued that Ms. Daras’s position as General Counsel for all of Internova created a heightened risk of accidental disclosure and that plaintiffs should have to justify her access on a document-by-document basis. The defendant also argued that access could enable commercial espionage. The court rejected imposing a greater burden based only on her in-house status and found that the defendant offered theories and speculation rather than evidence of the asserted risks.

Based on the record, the court found that Ms. Daras appeared to perform a legal role and was not involved in competitive decisionmaking, making the risk of accidental disclosure minimal. The court further found that plaintiffs would be prejudiced if she were denied access to all highly confidential information because she was the liaison between outside counsel and Internova, would help with day-to-day case demands and strategy, and needed access to information relevant to strategy and settlement discussions.

The court distinguished the defendant’s description of a prior decision concerning commercial espionage, stating that the defendant had misstated that decision’s facts and holding. The court noted that the defendant described Nous as a fledgling company with fewer than ten employees and no contracts with travel advisors, which made the asserted possibility of commercial espionage appear remote on the defendant’s own description.

Ruling

Judge Loretta A. Preska ordered that Ms. Daras, or any successor to her role, receive access to highly confidential information other than Nous’s financial records and arrangements. The court stated that those financial materials could be redacted because Ms. Daras could likely perform her role without seeing them, while disclosure could create a risk of harm to Nous. If plaintiffs’ counsel believes access to specific financial information is necessary, plaintiffs’ counsel must confer in good faith with defendant’s counsel and, if necessary, apply to the court for further relief.

Disposition

The opinion resolves the parties’ dispute over the protective order’s access limits. It does not decide the underlying claims in the case.