Claims and Bad Faith Law Blog

SHARING CLAUSES, STIPULATED PROTECTIVE ORDERS, AND FEDERAL COURTS.

Courts generally accept stipulated protective orders proposed by the parties.  In federal courts, there is a prevailing conception that “sharing clauses” are frowned upon, in line with the usual prohibition on sharing discovery in one case with other cases. “Sharing clauses” can be found in stipulated protective orders authorized by the courts.

            However, it has been observed that federal courts disfavor sharing clauses. This observation was made by a U.S. Magistrate Judge in a case in which she refused to authorize a sharing clause.¹ In an opinion that may inadvertently become a guide for parties and their lawyers to make a showing in federal courts as to why a sharing clause should be given effect, the Magistrate Judge wrote in such a way as to illustrate two ways in which such a showing might be made successfully.  Careful readers of court opinions will see this right away when they read the opinion in this case.

            The first way lies in the decided case law analyzed by the Magistrate Judge to the effect that the courts have authorized the use of sharing clauses when the party seeking to share has made a showing that the discovery in question is “highly relevant to other litigation,” and so sharing the subject discovery among different cases would have the following salutary effects that might be attractive to a federal judge:

• avoiding duplication;
• promoting efficiency;
• minimizing discovery costs, and 
• conserving judicial resources..”²

            The second way of making such a showing in a case in federal court suggested by the Magistrate's opinion is to "articulate[] specific ways in which the sharing of information could be useful to this case."³ There may be overlap between these two ways of making a successful showing that a sharing clause is desirable in a given case, but the second way mentioned here allows the possibility of other proofs besides those at work in the first way.

 

[1]   SRH Holdings, LLC v. Gov't Emp's Ins. Co., No. 23-10325-DJC, 2024 WL 51279, at *1 (D. Mass. Jan. 4, 2024) (Boal, USMJ).

[2]  SRH Holdings, 2024 WL 51279, at *1.

[3]  SRH Holdings, 2024 WL 51279, at *2. 

 

Please read the disclaimer.  This blog post ©Dennis J. Wall 2024.  All rights reserved.

JOINT MOTION TO ENTER STIPULATED PROTECTIVE ORDER IS NOT ENOUGH.

A joint motion for entry of a stipulated protective order is not enough for a federal court to enter the stipulated order.  "Rule 26(c) allows the Court to enter a protective order for good cause shown."  Gordon v. Menard, Inc., No. 1:23-cv-00317-HAB-SLC, 2023 WL 6619427, at *1 (N.D. Ind. Oct. 10, 2023) (Collins, USMJ).  Good cause was not shown in Gordon, which is why the Magistrate Judge denied the joint motion without prejudice.

              To begin with, the proposed stipulated protective order was overbroad on its face.  In pertinent part, "it seeks to protect information regarding current and former employees and agents," but as the Court pointed out, there are many times when employee information is subject to disclosure such that an absolute ban on disclosure is contrary to the law.  See Gordon, 2023 WL 6619427, at *1.

              Next, all parties failed to show good cause to protect "Defendant Menard Inc.'s training videos and materials, policy and procedure, information of Menard Inc. and its shareholders and directors, store surveillance videos, and blueprints and schematics."  Gordon, 2023 WL 6619427, at *2.

              An insurance carrier's desire to protect its similar information from disclosure is obvious, particularly if the parties to an insurance case can get away with stipulating to protect something as ill-defined as otherwise unidentified "information of [the insurance company] and its shareholders and directors," similar to what the parties tried to do in proposing their stipulated order in Gordon.  In Gordon, though, the parties' stipulation to protect did not fly in this regard.  "The proposed order makes no effort to specify why the purported protected materials are confidential."  Gordon, 2023 WL 6619427, at *2.

              For a third drawback in the eyes of the Gordon Court, the proposed order would have allowed the parties to file documents marked "Confidential Material" under seal in their entirety, without redacting the supposedly confidential information.  This, too, is contrary to law.  See Gordon, 2023 WL 6619427, at *2.

              For the benefit of the parties in the future, including if and when they redraft and resubmit their proposed stipulated protective order, the Court had two more things to say.  First, this Court "is unwilling to enter a protective order that suggests it retain jurisdiction of any kind after resolution of the case[.]"  Gordon, 2023 WL 6619427, at *2 (emphasis by the Court).

              Second, the Court admonished the parties to modify their version of protected confidentiality of information once the case came to an end:

Similarly, the parties should expressly state that any provisions requiring the return or destruction of confidential or protected information at the end of this litigation—such as those in Paragraph 4 of the proposed order (ECF 16-1 ¶ 4)—do not apply to the Court or material filed with the Court.

Gordon, 2023 WL 6619427, at *2.

              While entering all of these relatively clear and unambiguous rulings that leave no room for reasonable interpretation, the Court actually began its opinion in this case with a seeming ambiguity.  As was pointed out above, the Court began its rulings in this case by referencing Federal Rule of Civil Procedure 26(c)'s requirement of "good cause" before any protective order can be entered by a federal court.

              However, the Court pointed out in a footnote that the same level of scrutiny of what exactly constitutes "good cause" varies from case to case, and that it was applying "a higher level of scrutiny" for a good cause showing that the Court determined was required here, "[b]ecause the proposed order permits filing under seal without court permission[.]"  Gordon, 2023 WL 6619427, at *1 n.1.

              This is an important concept for practitioners and judges to keep in mind when evaluating whether good cause has been shown to shield discovery, evidence, information, or anything else during litigation in federal courts – including insurer bad faith litigation among the rest.

Stipulated Protective Orders in Federal and State litigation are addressed in § 3:107.50 concerning third-party bad faith claims, in Volume 1 of DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (West Publishing Co. 3d Edition, 2024 Supplements in process), and in § 9:28.50 as they relate to first-party bad faith cases, in Volume 2 of DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (West Publishing Co. 3d Edition, 2024 Supplements in process).

Please read the disclaimer.  ©2024 Dennis J. Wall.  All rights reserved.

"SHARING CLAUSES" AVOID DUPLICATIVE DISCOVERY, REQUIRE SHOWING.

There is a recognized exception to the usual prohibition on sharing discovery in one case with other cases.  That exception concerns "sharing clauses" written into stipulated protective orders and authorized by the courts.

Federal courts disfavor sharing clauses.  This observation was made by a U.S. Magistrate Judge in a case in which she refused to authorize a sharing clause.  SRH Holdings, LLC v. Gov't Emp's Ins. Co., No. 23-10325-DJC, 2024 WL 51279, at *1 (D. Mass. Jan. 4, 2024) (Boal, USMJ).  The Court noted that so far, courts have allowed sharing clauses only when the party seeking to share has made a showing that the discovery in question is "highly relevant to other litigation,"  i.e., sharing the discovery among different cases would avoid duplicative discovery and "would promote efficiency, minimize discovery costs, and conserve judicial resources."  SRH Holdings, 2024 WL 51279, at *1.

This deserves further attention in future cases.

Section 2:18 by the author in Volume 1 of Catastrophe Claims / Insurance Coverage for Natural and Man-Made Disasters (Thomson Reuters Nov. 2023 Ed.), addresses Post-Claims Handling Practices Issues—The Presumption of Public Access vs. Stipulated Secrecy Orders.

Please read the disclaimer.  ©2024 Dennis J. Wall.  All rights reserved.

FORGET TO RAISE A PRIVILEGE BEFORE PRODUCTION? STIPULATE!

In U.S.A. v. Cherokee Gen. Corp., No. 2:22-cv-00299-KKE, 2023 WL 7624807 (W.D. Wash. Nov. 14, 2023), the parties stipulated that the Court should enter a Protective Order saying that if the parties produced information during discovery that they later thought was privileged and so should not have been produced (perhaps reflecting a reasonable concern about notifying E&O or malpractice carriers), then the information should be treated as privileged and returned to the owner.  The federal judge in this case agreed and entered the parties' Stipulated Protective Order in this regard:  "Information produced in discovery that is protected as privileged or work product shall be immediately returned to the producing party."  Cherokee General, 2023 WL 7624807, at *6.

So, if you forget to raise a privilege before production, stipulate with your opposing counsel that you did not have to raise the privilege.  Perhaps a federal judge, a fellow lawyer, will look kindly upon you.

Please read the disclaimer.  ©2023 Dennis J. Wall.  All rights reserved.

INVESTING IN SECRECY.

In Wallace v. Ameripro EMS, LLC, No. 3:23-cv-1249-MMH-JBT, 2023 WL 7282888 (M.D. Fla. Nov. 3, 2023), the defendant filed an "Unopposed Motion to Seal Response to Jurisdictional Order and for Confidentiality".  The motion was unopposed, as everyone can see from the title.

The Court denied this motion anyway.  The defendant lost an unopposed motion to seal.  Here is the background behind this motion.

Although the Court's opinion does not reflect the nature of the action, PACER reveals that this is a civil suit for alleged breach of contract and an accounting over an allegedly agreed purchase of an ambulance service's assets.   In what appears to be an ordinary order, the Court ordered the defendant to disclose certain limited information about its investors in order to establish the jurisdiction of the Court to hear this case:  "As relevant here, the Court explained that to establish its citizenship, AmeriPro must disclose both the identity and the citizenship of its members."  Wallace, 2023 WL 7282888, at *1.

Rather than simply identify its members and reveal their citizenship publicly, the Defendant filed a motion to seal that information and keep it out of the public eye.

The defendant said itself that it filed its very unusual motion in an effort to forever seal the identity of its shy investors who did not want to have their financial interests revealed publicly.  Wallace, 2023 WL 7282888, at *1.

This is the Court's summary of why it denied these shy investors' unopposed motion:

In the Motion, AmeriPro asserts that a seal is warranted because revealing the names of these silent members in the public record “would violate their right to privacy of their investments.” Id. Notably, AmeriPro does not cite any legal authority for this proposition.

    Upon due consideration, the Court finds that this interest alone does not constitute a compelling justification sufficient to overcome the public's right of access.

 

Wallace, 2023 WL 7282888, at *1.

 

It is interesting that at one point, the District Judge in this case was almost solicitous toward the Defendant.  See Wallace, 2023 WL 7282888, at *1 n.2.  The Court suggested that perhaps the defendant and its attorneys misunderstood the Court's order on jurisdiction.  In my over 45 years of practicing law, including in the Middle District of Florida, Jacksonville Division, where this case is pending, I do not recall an occasion when a federal judge was solicitous about parties or lawyers misunderstanding her or his rulings.  That's what motions for rehearing are for, in my experience.  I do vividly recall that federal judges uniformly expected us to obey their orders whether or not we liked them.

 

Investing in secrecy as a reasonable expectation for financial transactions?  Not today, not even in Florida.

 

Please read the disclaimer.  ©2023 Dennis J. Wall.  All rights reserved.

 

JOINT MOTION TO ENTER STIPULATED PROTECTIVE ORDER IS NOT ENOUGH.

A joint motion for entry of a stipulated protective order is not enough for a federal Court to enter the stipulated order.  “Rule 26(c) allows the Court to enter a protective order for good cause shown.”  Gordon v. Menard, Inc., No. 1:23-cv-00317-HAB-SLC, 2023 WL 6619427, at *1 (N.D. Ind. Oct. 10, 2023) (Collins, USMJ).  Good cause was not shown in Gordon, and here’s why the Magistrate Judge denied the joint motion without prejudice.

To begin with, the proposed stipulated protective order was overbroad on its face.  In pertinent part, “it seeks to protect information regarding current and former employees and agents,” but as the Court pointed out, there are many times when employee information is subject to disclosure such that an absolute ban on disclosure is contrary to the law.  See Gordon, 2023 WL 6619427, at *1.

Next, all parties failed to show good cause to protect “Defendant Menard Inc.’s training videos and materials, policy and procedure, information of Menard Inc. and its shareholders and directors, store surveillance videos, and blueprints and schematics.”  Gordon, 2023 WL 6619427, at *2.

An insurance carrier’s desire to protect its similar information from disclosure is obvious, particularly if the parties to an insurance case can get away with stipulating to protect something as ill-defined as otherwise unidentified “information of [the insurance company] and its shareholders and directors,” similar to what the parties tried to do in proposing their stipulated order in Gordon.  In Gordon, though, the parties’ stipulation to protect did not fly in this regard.  “The proposed order makes no effort to specify why the purported protected materials are confidential.”  Gordon, 2023 WL 6619427, at *2.

For a third drawback in the eyes of the Gordon Court, the proposed order would have allowed the parties to file documents marked “Confidential Material” under seal in their entirety, without redacting the supposedly confidential information.  This, too, is contrary to law.  See Gordon, 2023 WL 6619427, at *2.

For the benefit of the parties in the future, including if and when they redraft and resubmit their proposed stipulated protective order, the Court had two more things to say.  First, this Court “is unwilling to enter a protective order that suggests it retain jurisdiction of any kind after resolution of the case[.]”  Gordon, 2023 WL 6619427, at *2 (emphasis by the Court).

Second, the Court admonished the parties to modify their version of protected confidentiality of information once the case came to an end:

Similarly, the parties should expressly state that any provisions requiring the return or destruction of confidential or protected information at the end of this litigation—such as those in Paragraph 4 of the proposed order (ECF 16-1 ¶ 4)—do not apply to the Court or material filed with the Court.

Gordon, 2023 WL 6619427, at *2.

While entering all of these relatively clear and unambiguous rulings that leave no room for reasonable interpretation, the Court actually began its opinion in this case with a seeming ambiguity.  As was pointed out here, the Court began its rulings by referencing Federal Rule of Civil Procedure 26(c)’s requirement of “good cause” before any protective order can be entered by a federal Court.

However, the Court pointed out in a footnote that the same level of scrutiny of what exactly constitutes “good cause” varies from case to case, and that it was applying “a higher level of scrutiny” that was required here “[b]ecause the proposed order permits filing under seal without court permission[.]”  Gordon, 2023 WL 6619427, at *1 n.1.

This is an important concept for practitioners and judges to keep in mind when evaluating whether good cause has been shown to shield discovery, evidence, information, or anything else during litigation in federal Courts – including insurer bad faith litigation among the rest.

Please read the disclaimer.  ©2023 Dennis J. Wall.  All rights reserved.

SEALING PUBLIC RECORDS: LESSONS FROM UTAH AND MISSOURI FEDERAL COURTS.

After documents have been made available to the public, it will be difficult to overcome the presumption of public access and seal them.[1]

          This difficulty was apparently not an obstacle in a decision reported neither in Federal Supplement or in Westlaw:  Loy v. BMW of North America, LLC.[2]  Following the entry of  a previous order in the case,[3] the Court conducted an in camera inspection and denied plaintiffs' motion to compel.[4]  In the course of denying the motion to compel, the Court also denied the plaintiffs' request to remove the confidential designation from certain materials previously presented at a conference.

           The Court noted in its slipsheet opinion that these documents which BMW marked "Confidential," were slides "presented during a conference in Las Vegas, Nevada in 2018[.]"[5] 

 

[1] See Liberty Mut. Fire Ins. Co. v. Michael Baker Int'l, Inc., No. 2:19-cv-00881, 2023 WL 2504575, at *12 (D. Utah March 14, 2023) (Oberg, USMJ).

[2] Loy v. BMW of N. Am., LLC, No. 4:19-CV-00184 JAR, slip op. (E.D. Mo. Oct. 7, 2021).  This is Document No. 112 in the Court File, available on PACER.

[3] Loy v. BMW of N. Am., No. 4:19-CV-00184 JAR, 2021 WL 3930501 (E.D. Mo. Sept. 2, 2021).

[4] Loy v. BMW of N. Am., LLC, No. 4:19-CV-00184 JAR, slip op. at 2 (E.D. Mo. Oct. 7, 2021).

[5] Loy v. BMW of N. Am., LLC, No. 4:19-CV-00184 JAR, slip op. at 1 (E.D. Mo. Oct. 7, 2021).

 

The how and why and best practices of Stipulated Protective Orders and their secrecy protections in particular, are examined in first-party case law in 2 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 9:28.50 (3d Edition West Publishing Company, 2023 Supplements in process).  These issues arising in third-party cases are discussed in 1 id., § 3:107.50.

Please read the disclaimer.  This blog article ©2023 Dennis J. Wall.  All rights reserved.

GOOGLE, SECRECY, AND DISCLOSURE ORDERED BY FEDERAL COURT.

(Bing Clip Art via Barry Law School)

Neither Defendant Google's "internal practices" or a stipulated protective order furnished the necessary statement of compelling reasons to support sealing Google's "internal business documents" in In re Google Play Store Antitrust Litigation.[1] 

    Google's "strict" internal policy of keeping such documents secret was of no avail, because "permitting sealing on the basis of a party's internal practices would leave the fox guarding the hen house."[2] 

    Similarly, the parties' stipulated protective order did not fuel Google's search for secrecy in this case:  "The parties cannot curtail public access by agreement."[3]

 

[1] In re Google Play Store Antitrust Litig., No. 21-md-02981-JD, 2021 WL 4305017 (N.D. Cal. Aug. 18, 2021).

[2] Google Play Store Antitrust Litigation, 2021 WL 4305017, at *1.

[3] Google Play Store Antitrust Litigation, 2021 WL 4305017, at *1.

Secrecy, stipulated protective orders, and the requirements of sealing and unsealing in litigation are disclosed in 1 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:107.50 (West Publishing Company 3d Edition, 2023 Supplements in process).

Please read the disclaimer.  This blog article ©2023 Dennis J. Wall.  All rights reserved.

Ocasio v. C.R. Bard: READING THE LOCAL RULES ONE YEAR LATER.

Ocasio v. C.R. Bard, Inc., No. 8:13-cv-1962-CEH-AEP, 2021 WL 2477259 (M.D. Fla. June 17, 2021) was decided on June 17, 2021.

Three were 7 lawyers of record by my count.  Four were from outside Florida.  These 4 were obviously the lead counsel and the remaining lawyers apparently served as local counsel.

The decision in this case by Judge Honeywell was to deny unopposed motions of the plaintiffs and of the defendants to seal certain deposition transcripts.  The parties jointly requested the Court to seal “53 deposition transcripts that the parties intend to play at trial.”  Ocasio, 2021 WL 2477259, at *1.

The Court denied this unopposed joint request to seal testimony for several reasons.

First, the defendants represented to the Court that sealing the entire set of 53 deposition transcripts was the narrowest method they knew of keeping proprietary information confidential.  Judge Honeywell’s answer was that “the Court finds this blanket statement to be unsupported and improbable.”  Ocasio, 2021 WL 2477259, at *2.

Next, the parties proposed to read or play the depositions “in open court and thus the matter will not be kept confidential from any member of the general public attending the trial.”    Ocasio, 2021 WL 2477259, at *2.

Third, the fact that the parties declared these transcripts to be confidential did not by itself make them confidential.  Ocasio, 2021 WL 2477259, at *2.

In short, for all these reasons the parties did not jointly show “good cause” and they did not in their unopposed motions overcome the presumption of public access to these documents.  Ocasio, 2021 WL 2477259, at *2.  But none of these reasons was the main reason for decision here.

The most important reason for denying the parties’ joint unopposed motions to seal was that they apparently did not read Middle District of Florida Local Rule 1.11(a).  Whether they read it or not, they obviously did not follow it.  If they had, they might have succeeded.  Local Rule 1.11(a), relied on by the Court as a basis for its Order, provides in full as follows:

Rule 1.11 - Filing Under Seal in a Civil Action

• PUBLIC RIGHT OF ACCESS. Because constitutional law and common law afford the public a qualified right of access to an item filed in connection with the adjudication of a claim or defense, sealing is unavailable absent a compelling justification. Sealing is not authorized by a confidentiality agreement, a protective order, a designation of confidentiality, or a stipulation.

M.D. Fla. Local Rule 1.11(a) (emphasis added).

The lesson for practitioners is pretty well summarized (if I do say so myself) in the title of my Letter to the Editor about the Ocasio v. C.R. Bard decision, published in the August 1, 2021 edition of The Florida Bar News:  Read The Local Rules.

Please read the disclaimer.  ©2022 Dennis J. Wall.  All rights reserved.

PUBLIC ACCESS TO COURT RECORDS PROTECTED BY THE U.S. CONSTITUTION!

I am grateful to the American Constitution Society and to Barry Law School for their invitation to speak at the Seventh Annual Constitutional Law Scholars Forum.  I will be speaking on Friday, February 25th about the Constitution's Presumption of Public Access to Court Files.  The Forum is presented free and online this year, as it was last year.

Join the Forum online!  The Forum is being broadcast from Barry Law School in Orlando, here!  It's free and open to everyone!

Please read the disclaimer.  ©2022 Dennis J. Wall.  All rights reserved.

GENERAL OBJECTIONS IGNORED, COURT'S STANDARD STIPULATED PROTECTIVE ORDER OBSERVED.

Once again, general objections repeated endlessly in reply to specific discovery requests are not responses at all.  Stated differently, general objections are not given any attention by the courts whenever specific objections to discovery requests are required by the applicable rules.  See Dyno Nobel, Inc. v. Johnson, NO. 5:21-cv-00322-KKC-MAS, 2022 WL 507431, at *3 (E.D. Ky. Feb. 18, 2022) (Stinnett, USMJ).

Dyno was requested to produce documents in this Kentucky case that were subject to a federal court's standard stipulated protective order in use by the federal court where litigation is pending in Utah.  In this case, the Utah protection was provided in Kentucky as well.  Dyno Nobel, 2022 WL 507431, at *5.

Please read the disclaimer.  ©2022 Dennis J. Wall.  All rights reserved.

JOIN THE ONLINE ACS CONSTITUTIONAL LAW FORUM ON FEBRUARY 25!

Honored to accept the invitation to speak on February 25 at the American Constitution Society's Seventh Annual Constitutional Law Scholars Forum.  I will be presenting on the Constitution's Presumption of Public Access to Court Files.

Join the Forum online at Barry Law School in Orlando, here!  It's free and open to everyone!

Please read the disclaimer.  ©2022 Dennis J. Wall.  All rights reserved.

WEBINAR ON DISCOVERY CONFIDENTIALITY, COMING UP!

 Readers, here is a link to the Discovery Confidential! page of my website.  Thanks.--Dennis Wall

 Click here for the Mobile/Web Version

Discovery Confidentiality February 22, 2:00 p.m. ET–3:00 p.m. ET Pricing Private Attorney Members: $40 Legal Aid and Public Interest Members: $30 Nonmembers: $90 (if you have not yet been approved to attend NACA webinars, you must email [email protected] to be vetted to attend) Are you interested in learning the methodologies of stipulated protective orders  proposed by defendants’ counsel in every case, large and small? The focus will be on federal court cases, but many of the same principles apply to state court cases, too. The webinar will include a discussion of standards for obtaining protective orders that the parties are bound to follow. This webinar will also provide tips and strategies to improve the pre-discovery stipulated protective orders that judges are most likely to enter in your clients’ cases. In addition, the speakers will examine typical provisions used in actual litigation.  This webinar is useful for practitioners at every level, from those who handle multi-district litigation to individual cases. What You Will Learn How to address negotiations over a stipulated protective order and how you can shape the best possible protections for your client What adversaries will likely propose in their pre-discovery umbrella and stipulated protective orders How to implement preemptive strategies, including judges’ model orders, local rules, and orders approved by the same judge or proposed by the same defendants in other cases Speakers Jody López-Jacobs is a consumer protection attorney based in Philadelphia.  Born in Lancaster, PA, Jody graduated magna cum laude from Temple University Beasley School of Law, where he served on the law review editorial board and won second place in an American Bar Association writing competition. After serving as a federal law clerk in the Eastern District of Pennsylvania, Jody joined the law firm Flitter Milz, PC, where he litigates individual and class actions involving repossessions, credit reporting, and financing fraud. Jody’s advocacy has resulted in millions of dollars in relief for consumers across the country. In 2021, Jody was named as one of Super Lawyers’ “Rising Stars.” Ariana Tadler is the founding partner of Tadler Law LLP, a WBENC-certified, women-owned boutique law firm that offers an array of litigation and legal counseling services. With more than twenty-seven years of experience advocating for consumers and investors against corporate fraud and abuse while litigating and managing securities, consumer and data breach class actions, and complex litigation, Ariana is considered one of the leading women litigators in the country. Ariana is regularly appointed by courts to leadership positions in large, complex federal, multi-district, and state coordinated proceedings because of her extensive experience managing complex litigation. Ariana is also recognized as one of the nation’s leading authorities on electronic discovery and pioneered the establishment of an e-Discovery Practice group within a plaintiffs’ firm structure more than fifteen years ago. Dennis Wall is an experienced litigator, mediator, and expert witness in Florida and federal trial and appellate courts. He is an AV- rated attorney and an elected member of the American Law Institute. He has personally litigated the issues addressed in this webinar. The author of four books, he is currently at work on a book about the presumption of public access to judicial and administrative records. He has dedicated a page on his website to resources on discovery confidentiality.   National Association of Consumer Advocates 1215 17th Street NW, 5th Floor, Washington, DC 20036 Phone: 202.452.1989 | Fax: 202.452.0099 Contact Us

WEBINAR NEXT WEEK: DISCOVERY CONFIDENTIALITY!

 Readers, here is a link to the Discovery Confidential! page of my website.  Thanks.--Dennis Wall

 Click here for the Mobile/Web Version

Discovery Confidentiality February 22, 2:00 p.m. ET–3:00 p.m. ET Pricing Private Attorney Members: $40 Legal Aid and Public Interest Members: $30 Nonmembers: $90 (if you have not yet been approved to attend NACA webinars, you must email [email protected] to be vetted to attend) Are you interested in learning the methodologies of stipulated protective orders  proposed by defendants’ counsel in every case, large and small? The focus will be on federal court cases, but many of the same principles apply to state court cases, too. The webinar will include a discussion of standards for obtaining protective orders that the parties are bound to follow. This webinar will also provide tips and strategies to improve the pre-discovery stipulated protective orders that judges are most likely to enter in your clients’ cases. In addition, the speakers will examine typical provisions used in actual litigation.  This webinar is useful for practitioners at every level, from those who handle multi-district litigation to individual cases. What You Will Learn How to address negotiations over a stipulated protective order and how you can shape the best possible protections for your client What adversaries will likely propose in their pre-discovery umbrella and stipulated protective orders How to implement preemptive strategies, including judges’ model orders, local rules, and orders approved by the same judge or proposed by the same defendants in other cases Speakers Jody López-Jacobs is a consumer protection attorney based in Philadelphia.  Born in Lancaster, PA, Jody graduated magna cum laude from Temple University Beasley School of Law, where he served on the law review editorial board and won second place in an American Bar Association writing competition. After serving as a federal law clerk in the Eastern District of Pennsylvania, Jody joined the law firm Flitter Milz, PC, where he litigates individual and class actions involving repossessions, credit reporting, and financing fraud. Jody’s advocacy has resulted in millions of dollars in relief for consumers across the country. In 2021, Jody was named as one of Super Lawyers’ “Rising Stars.” Ariana Tadler is the founding partner of Tadler Law LLP, a WBENC-certified, women-owned boutique law firm that offers an array of litigation and legal counseling services. With more than twenty-seven years of experience advocating for consumers and investors against corporate fraud and abuse while litigating and managing securities, consumer and data breach class actions, and complex litigation, Ariana is considered one of the leading women litigators in the country. Ariana is regularly appointed by courts to leadership positions in large, complex federal, multi-district, and state coordinated proceedings because of her extensive experience managing complex litigation. Ariana is also recognized as one of the nation’s leading authorities on electronic discovery and pioneered the establishment of an e-Discovery Practice group within a plaintiffs’ firm structure more than fifteen years ago. Dennis Wall is an experienced litigator, mediator, and expert witness in Florida and federal trial and appellate courts. He is an AV- rated attorney and an elected member of the American Law Institute. He has personally litigated the issues addressed in this webinar. The author of four books, he is currently at work on a book about the presumption of public access to judicial and administrative records. He has dedicated a page on his website to resources on discovery confidentiality.   National Association of Consumer Advocates 1215 17th Street NW, 5th Floor, Washington, DC 20036 Phone: 202.452.1989 | Fax: 202.452.0099 Contact Us

DISCOVERY CONFIDENTIALITY WEBINAR!

 Readers, here is a link to the Discovery Confidential! page of my website.  Thanks.--Dennis Wall

 

 Click here for the Mobile/Web Version

Discovery Confidentiality February 22, 2:00 p.m. ET–3:00 p.m. ET Pricing Private Attorney Members: $40 Legal Aid and Public Interest Members: $30 Nonmembers: $90 (if you have not yet been approved to attend NACA webinars, you must email [email protected] to be vetted to attend) Are you interested in learning the methodologies of stipulated protective orders  proposed by defendants’ counsel in every case, large and small? The focus will be on federal court cases, but many of the same principles apply to state court cases, too. The webinar will include a discussion of standards for obtaining protective orders that the parties are bound to follow. This webinar will also provide tips and strategies to improve the pre-discovery stipulated protective orders that judges are most likely to enter in your clients’ cases. In addition, the speakers will examine typical provisions used in actual litigation.  This webinar is useful for practitioners at every level, from those who handle  multi-district litigation to individual cases. What You Will Learn How to address negotiations over a stipulated protective order and how you can shape the best possible protections for your client What adversaries will likely propose in their pre-discovery umbrella and stipulated protective orders How to implement preemptive strategies, including judges’ model orders, local rules, and orders approved by the same judge or proposed by the same defendants in other cases Speakers Jody López-Jacobs is a consumer protection attorney based in Philadelphia.  Born in Lancaster, PA, Jody graduated magna cum laude from Temple University Beasley School of Law, where he served on the law review editorial board and won second place in an American Bar Association writing competition. After serving as a federal law clerk in the Eastern District of Pennsylvania, Jody joined the law firm Flitter Milz, PC, where he litigates individual and class actions involving repossessions, credit reporting, and financing fraud. Jody’s advocacy has resulted in millions of dollars in relief for consumers across the country. In 2021, Jody was named as one of Super Lawyers’ “Rising Stars.”   Ariana Tadler is the founding partner of Tadler Law LLP, a WBENC-certified, women-owned boutique law firm that offers an array of litigation and legal counseling services. With more than twenty-seven years of experience advocating for consumers and investors against corporate fraud and abuse while litigating and managing securities, consumer and data breach class actions, and complex litigation, Ariana is considered one of the leading women litigators in the country. Ariana is regularly appointed by courts to leadership positions in large, complex federal, multi-district, and state coordinated proceedings because of her extensive experience managing complex litigation. Ariana is also recognized as one of the nation’s leading authorities on electronic discovery and pioneered the establishment of an e-Discovery Practice group within a plaintiffs’ firm structure more than fifteen years ago.   Dennis Wall is an experienced litigator, mediator, and expert witness in Florida and federal trial and appellate courts. He is an AV- rated attorney and an elected member of the American Law Institute. He has personally litigated the issues addressed in this webinar. The author of four books, he is currently at work on a book about the presumption of public access to judicial and administrative records. He has dedicated a page on his website to resources on discovery confidentiality.   National Association of Consumer Advocates 1215 17th Street NW, 5th Floor, Washington, DC 20036 Phone: 202.452.1989 | Fax: 202.452.0099 Contact Us

 

CONFIDENTIALITY: THE NEXT FRONTIER.

Confidentiality is an issue in every dispute.  There do not have to be lawsuits for confidentiality to be an issue.  It is an issue between people and organizations whenever they have a dispute.

          In some disputes, the issue arises in "Nondisclosure Agreements."  In lawsuits in particular, the usual vehicles used to raise the issue are called "Stipulated Protective Orders."

          In all disputes, confidentiality is an issue.  Beginning your research in a dispute involving confidentiality and in lawsuits in particular, discovery confidentiality?  Begin your research into Confidentiality including into Discovery Confidentiality by checking out the in-depth sources I am making available on the Discovery Confidentiality page.

Please read the disclaimer.  ©2022 Dennis J. Wall.  All rights reserved.

PUBLIC ACCESS TO RECORDS: STATE MAKES PUBLIC ACCESS THE DEFAULT.

Thanks to Penn's The Regulatory Review for publishing my essay on the new default of public access to administrative and judicial records as a matter of public policy. You can read my candid thoughts in New Public Access to Court Records on PENN REGULATORY REVIEW, online on Feb. 7, 2022, here:  https://www.theregreview.org/2022/02/07/wall-new-public-access-court-records/

For further research into Discovery Confidentiality, visit the Discovery Confidentiality page of my website.

Please read the disclaimer.  ©2022 Dennis J. Wall.  All rights reserved.

"CONFIDENTIAL" STIPULATION IS INVALID WHEN THE INFORMATION IS ALREADY PUBLIC.

Parties and their counsel cannot make information “confidential” that is already publicly available, just because they follow the requirements of a Stipulated Confidentiality or  Protective Order.  That is what some parties and their counsel tried to do with an expert’s prior compensation information consisting of the expert’s declarations regarding compensation, case lists, invoices, and deposition testimony regarding compensation, in Parks v. Ethicon, Inc., No.: 20-CV-989-LL-RBB, 2022 WL 214753 (S.D. Cal. Jan. 24, 2022).  The expert's compensation information had already been produced in other cases before this one.

    The Magistrate Judge, the opposing parties, and in the end, the District Judge were having none of it as far as protecting the "Confidentiality" of such information:

The Court agrees with Magistrate Judge Brooks and Defendants that Dr. Elliott’s prior compensation as an expert witness is not confidential and therefore not entitled to protection under the Protective Order. See July 29 Order at 7–8; Opp’n at 3–4, 6. Simply stated, Dr. Elliott’s prior expert compensation has been produced—without Dr. Elliott maintaining its confidentiality—in at least forty cases, (see ECF No. 18-1 ¶ 4; see also ECF No. 169-2), and even discussed in open court.

Parks, 2022 WL 214753, at *4.

For further research into Discovery Confidentiality, visit the Discovery Confidentiality page of my website.

Please read the disclaimer.  ©2022 Dennis J. Wall.  All rights reserved.

STIPULATED PROTECTIVE ORDERS ARE NOT FOR EVERYONE.

"Stipulated protective orders might be commonplace in complex commercial litigation, but nothing requires that the parties agree to one in any given case."  Perirx, Inc. v. Regents Univ. Cal., No. 2:20-cv-02212-JDW, 2022 WL 180221, at *5 (E.D. Pa. January 20, 2022).

Research resources on Discovery Confidentiality at https://www.dennisjwall.com/disc.htm.

 

Please read the disclaimer.  ©2022 Dennis J. Wall.  All rights reserved.

AND A LITTLE MAGISTRATE FROM NEVADA SHALL LEAD THEM ....

In Kinney v. GEICO Cas. Co., No. 2:20-cv-02167-GMN-DJA, 2021 WL 4851089 (D. Nev. September 3, 2021) (Albregts, USMJ), an insurance case, a U.S. Magistrate Judge refused to enter a Stipulated Protective Order written by the parties, not without modifications commanded by the law, in the eyes of the Magistrate.

          The Court added provisions required by the law throughout Federal Courts and particularly in the Ninth Circuit where this case is pending.  Some of the more significant additions demanded by the law are:

1. The Court's execution of the proposed order is not a ruling that any specific document or testimony is confidential and so a secret.
2. The "compelling reasons" burden of proof remains on the party seeking to seal. The Court explicitly set out the "compelling reasons" standard, so if any party or its lawyers did not know what that was, they do now.
3. The "good cause" exception is a narrow one, and the Court explained how this exception operates to the required default showing of compelling reasons to seal testimony or a document in the Court file.
4. Last but not least, the Court made clear that the Rules abide and trump the parties' Stipulated Protective Order wherever they may be in conflict.

The Court made all these things clear by adding the following provisions to the proposed order written by the parties, and all before the Court signed the proposed order:

• The Court has approved the instant protective order to facilitate discovery exchanges, but there has been no showing, and the Court has not found, that any specific documents are secret or confidential. The parties have not provided specific facts supported by declarations or concrete examples to establish that a protective order is required to protect any specific trade secret or other confidential information pursuant to Rule 26(c) or that disclosure would cause an identifiable and significant harm.

* * *

• Specifically, a party seeking to seal judicial records bears the burden of meeting the “compelling reasons” standard, as previously articulated in 447 F.3d 1172.  Under the compelling reasons standard, “a court may seal records only when it finds ‘a compelling reason and articulate[s] the factual basis for its ruling, without relying on hypothesis or conjecture.” Ctr. for Auto Safety, 809 F. 3d at 1097. (quoting Kamakana, 447 F.3d at 1179). “The court must then ‘conscientiously balance[ ] the competing interests of the public and the party who seeks to keep certain judicial records secret.”  Ctr. for Auto Safety, 809 F.3d at 1097.
• There is an exception to the compelling reasons standard where a party may satisfy the less exacting “good cause” standard for sealed materials attached to a discovery motion unrelated to the merits of the case. “The good cause language comes from Rule 26(c)(1), which governs the issuance of protective orders in the discovery process: ‘The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.’ ” Id. (citing Fed.R.Civ.P. 26(c)). “For good cause to exist, the party seeking protection bears the burden of showing specific prejudice or harm will result if no protective order is granted.”  Phillips v. General Motors, 307 F.3d 1206, 1210-11 (9th Cir. 2002).  

* * *

• To the extent any aspect of the stipulated protective order may conflict with this order or Local Rule IA 10-5, that aspect of the stipulated protective order is hereby superseded with this order.

Kinney v. GEICO Casualty Co., 2021 WL 4851089, at *1-*2 (emphasis by the Court).

          This precise and scholarly ruling begs the question of why GEICO and the other parties need a stipulated protective order in an insurance case.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

NFL SACKED BY JUDGE ALSUP AND THE LAW.

The case of Dent v. Nat'l Football League, No. C 14-02324 WHA, 2021 WL 4817749 (N.D. Cal. August 31, 2021) is a class action by former football players against the NFL alleging improper administration of pain medications.  As required by the terms of the Stipulated Protective Order the parties wrote in the case, the players filed a motion to have the Court seal the exhibits to their motion for certification of their class, for the sole reason that the NFL designated all those documents "confidential."

          The absurdity of such a common provision in SPOs became clear when the NFL did not file anything in support of the sealing request.  The NFL lost; the exhibits are not sealed.

           Reference to a stipulated protective order is insufficient to establish that the documents are sealable. Civ. L.R. 79-5(d)(1)(A). The NFL has not filed a declaration in support of sealing.

          Therefore, the motion is DENIED.

 Dent, 2021 WL 4817749, at *1.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

MORE TO Loy v. BMW THAN MEETS THE EYE.

There was another ruling in the Eastern District of Missouri worth commenting on.  Other rulings have previously been mentioned here on Labor Day 2021.  Happy Labor Day!

          In Loy v. BMW of N. Am., No. 4:19-CV-00184 JAR, 2021 WL 3930501 (E.D. Mo. September 2, 2021), the Court confronted a motion to remove the Confidentiality Designation from certain documents that BMW had assigned to them.  BMW argued that these documents were designated Confidential under a protective order in another case, and so they should be confidential in this case.

          The judge did not rule based on BMW's argument.  The judge ruled two things instead.  First, the plaintiffs in the instant case had previously represented that the materials from the other litigation would be subject to a protective order in this litigation as well.  The judge ruled that the plaintiffs should be held to that representation.  Loy v. BMW, 2021 WL 3930501, at *3.

          Second, the Court stands ready in the Eastern District of Missouri case to continue to review the Confidentiality Designations of the material from the other case, as the instant case progresses.  Loy v. BMW, 2021 WL 3930501, at *3.

          Good reasoning, good result in this writer's opinion.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

CALL THEM BY THEIR TRUE NAMES: THEY ARE "CONFIDENTIALITY ORDERS."

Following a rapidly accelerating trend, the Court in Loy v. BMW of N. Am., No. 4:19-CV-00184 JAR, 2021 WL 3930501 (E.D. Mo. September 2, 2021) called Stipulated Protective Orders by their true names:  "Confidentiality Orders."  They are orders written and submitted by the parties for the purpose of asking the courts to protect certain materials exchanged in discovery.  That is what they are.

          That is all they are.

          This practice is a trend accelerating in a crescendo of opinions, and it is a contemporary trend followed in the Third Circuit in particular.  Let it be followed everywhere; nothing will be lost, something will be gained and that something is how the issue is framed:  Confidentiality and the Rules of Civil Procedure.

          Parenthetically, the Court addressed two motions which implicated the "Confidentiality Orders" previously entered in that case.  One of the motions is of particular interest here.  It was a motion for contempt and sanctions, as to which the Court declined to strike affirmative defenses but reserved ruling on whether to award attorney's fees and costs in the future for discovery violations described in the opinion.

          Along with the motion for contempt and sanctions, the plaintiffs requested that the Court remove the "Confidentiality" designation from certain presentation slides which BMW designated as "Confidential" after BMW at first denied that the slides even existed.  The Court ordered BMW to submit the slides for the Court's in camera inspection.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

UNOPPOSED SEALING MAY NOT BE ENOUGH.

On August 11, 2021 we examined a case decided within the federal Sixth Circuit and how the judiciary in that case applied or did not apply Local Rules and the presumption of public access to court files.  In today's article we examine a different case decided within the Sixth Circuit by a different District Judge under Local Rules while applying the default presumption of public access to court files.

Arguing two motions to seal would have been a tough assignment in most cases.  Defendants wanted to seal parts of their motion for summary judgment in the Flint Water Cases.  They also wanted to seal four exhibits to their motion for summary judgment in these consolidated class action cases pending in the Eastern District of Michigan:

• An investigative subpoena transcript obtained from the Michigan Solicitor General's Office;
• Two expert reports, and
• The deposition transcript of an expert's testimony.

However, the defendants' sealing objectives did not stop there.  They also filed a motion to seal "'the report and deposition testimony of Class Plaintiffs' expert witness'" which was included in the defendants' motion to exclude or restrict the experts' testimony.  See In re Flint Water Cases (This Order Applies to ALL CASES), No. 5:17-cv-10164-JEL-MKM, 2021 WL 2254051, at *1 (E.D. Mich. May 12, 2021).

As the District Court ultimately pointed out in this case, Federal Courts located within the the Sixth Circuit recognize a presumption of public access to Court records.  Case law in the Sixth Circuit binds Federal Courts throughout the Circuit to carry out this presumption.

Local Rule 5.3 of the Eastern District of Michigan binds judges in the Eastern District of Michigan in particular, to the same presumption of public access to Court records.  The net effect of both the case law and the Local Rule is to require every party which asks for material to be sealed to show a compelling reason, and the District Court must recite specific findings and conclusions about every document which the Court authorizes to be sealed, "[e]ven if no party objects to a motion to seal[.]"  In re Flint Water Cases, 2021 WL 2254051, at *1.

Getting a Federal Judge to seal all of these materials, then, was not a task for the light-hearted.  It might have been hard to obtain the Court's authorization to seal the materials in question in any case, but it would certainly have looked less difficult given the added fact that the sealing motions were not opposed.  The plaintiffs did not oppose sealing any of these materials from public view.

What the Federal Judge did in response to two unopposed sealing motions is instructive to practitioners.  She did not grant the relief that the defendants requested.

An unopposed motion is a practitioner's dream.  You feel like you cannot lose, even though the final decision is up to the judge of course.  The odds do not get any better for your client's request in a case than when your client's request is not opposed by any other party in the litigation.  One unopposed motion is unusual; two unopposed motions is very rare, indeed.  Still, at the risk of repetition, it is ultimately the judge's job and not a practitioner's job to dispose of any motion.

In this case, the District Judge did not deny the sealing motions but she did not grant them either, even if both of them were unopposed.  She had previously entered a Confidentiality Order in the Flint Water Cases that required five things for any documents to be filed under seal with the authorization of the Court.  The defendants in this case apparently supplied four of those five things, but not the fifth under a Confidentiality Order prevailing in the case, which was "'a memorandum of legal authority supporting the seal.  See E.D. Mich. L.R. 5.3.'"  In re Flint Water Cases, 2021 WL 2254051, at *2.

The Court in this case accordingly required the defendants "to supplement their motions with a memorandum of law that sets forth how the [Sixth Circuit] factors apply to the items" that were requested to be sealed.  Of course, this was required by the terms of the Court's previous Confidentiality Order, but the Court patiently explained why the memorandum of law is important.  A memorandum is important "[i]n order for the Court to properly evaluate [the defendants'] requests to seal[.]"    In re Flint Water Cases, 2021 WL 2254051, at *2.

In our adversarial system, the absence of an adversary usually means that the party making its request prevails.  When a sealing motion is involved, however, the judge is always present and that means that to some degree, in the Sixth Circuit at least and particularly in the Eastern District of Michigan, the interests of the public in disclosure are represented in every case, even when no-one is present to argue in favor of disclosure to the public.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

ONCE AGREED, COURT ORDERS DISCLOSURE ACCORDING TO STIPULATED PROTECTIVE ORDER.

Even if the law apparently stands otherwise.

In Barrio Bros., LLC v. Revolucion, LLC, No. 1:18-CV-02052, 2021 WL 2463844 (N.D. Ohio June 17, 2021), a District Judge in the Northern District of Ohio considered an appeal from a Magistrate Judge's Report and Recommendation.  The Magistrate recommended that the plaintiffs' objections to production of certain Licensing Agreements be overruled.

In this case, both the Magistrate Judge and the District Judge appeared to enforce the parties' Stipulated Protective Order at the expense of the law including at the expense of Local Rules which one side of the litigation apparently followed.

The Magistrate Judge's recommendation and the District Judge's ruling came in a lawsuit involving the alleged theft of intellectual property rights.  Barrio Brothers and the other plaintiffs sued various defendants, complaining that one of the defendants, Condado Tacos, misappropriated Barrio's intellectual property rights in the way it designed and built its restaurants.

The Magistrate Judge granted Condado Tacos' motion to compel production of Barrio Brothers' Licensing Agreements with its third-party partners in several cities in Michigan, Ohio, and New Hampshire.  The third parties were not parties to the litigation, and apparently the theory behind the request for production was that the Licensing Agreements could show what Barrio Brothers franchised exactly, and what it did not.  The plaintiffs appealed to the District Judge from this ruling.  Barrio Brothers, 2021 WL 2463844, at *1.

Previously in this case, the plaintiffs and the defendants had agreed to a Stipulated Protective Order.  The order they wrote covered the production of documents like the Licensing Agreements.  Most important to the outcome of Barrio Brothers' production appeal, the parties' agreed order "provides Barrio a framework by which Barrio may seek out additional protection."  Barrio Brothers, 2021 WL 2463844, at *2.

In the eyes of both the Magistrate and the District Judge, the parties' agreed order determined the outcome of Barrio Brothers' appeal of the Magistrate's ruling.  "In other words," said the District Judge, " [i]f Barrio believes the Licensing Agreements merit additional protection, Barrio may seek such protection according to the terms of the Stipulated Protective Order." Barrio Brothers, 2021 WL 2463844, at *2.

The framework laid out in the agreed protective order by which Barrio Brothers and any of the other parties could seek out additional protection is not provided by the Rules of Civil Procedure.  The Federal Rules leave much to the discretion of the District Courts in any case.  See Fed. R. Civ. P. 26(c).

By their agreement in the Barrio Brothers case, the lawyers could mark their client's production as intended, for example, so as to prohibit disclosure of "highly sensitive competitive or confidential information to another party," or they could mark the production as restricted "only to specifically designated in-house counsel or party representatives."  Barrio Brothers, 2021 WL 2463844, at *2.

After a dispute arose over disclosure, the attorneys further agreed:

[T]hen the parties may stipulate or move for the establishment of an additional category of protection that prohibits disclosure of such documents or information to  category (2) ["Parties and employees of a party to this Order"] or that limits disclosure only to specifically designated in-house counsel or party representative(s) whose assistance is reasonably necessary to the conduct of the litigation and who agree to be bound by the terms of the order.

Barrio Bros., LLC v. Revolucion, LLC, Doc. No. 42, Stipulated Protective Order entered July 26, 2019, n.1 at p. 4 (N.D. Ohio Case No. 1:18-CV-02052) (emphasis supplied).

The Stipulated Protective Order further provided that any challenge to its terms had to be by motion in accordance with Northern District of Ohio Local Rule 7.1.  The agreed order provided that nothing in it would limit "the Court's power" to enter any orders "with respect to the use and disclosure of any documents produced or [their] use in discovery," in part here pertinent.  Barrio Bros., LLC v. Revolucion, LLC, Doc. No. 42, Stipulated Protective Order entered July 26, 2019, ¶ 8, at p. 7.

This is the framework provided almost word-for-word in Local Civil Rules Appendix L, a Form Stipulated Protective Order.  This is also the framework that Barrio Brothers followed here.

The Barrio Brothers lawyers took the matter up with the presiding judge.  They invoked the District Court's power to enter an order with respect to the use and disclosure of the Licensing Agreements in discovery.  They appealed the Magistrate Judge's recommendation that Barrio Brothers disclose the Licensing Agreements in question to Condado Tacos.  Barrio Brothers, 2021 WL 2463844, at *2.

It didn't work out well for nondisclosure of the Licensing Agreements in this case, however.  In the end, the District Judge clearly announced her expectation that the parties would follow the procedures they agreed upon when they wrote their Stipulated Protective Order for the Magistrate to sign in the first place.

In many jurisdictions including the Sixth Circuit, "secrecy in the context of discovery," as in this case, is subject to a "good cause" showing and a Stipulated Protective Order does not by itself provide the required good cause showing for nondisclosure.  In re:  Nat'l Prescrip. Opiate Litig. (HD Media Co. v. U.S. Dep't of Justice), 927 F.3d 919, 929-30 (6th Cir. 2019) (appeal in Multi-District Litigation centered in the Northern District of Ohio).  The Northern District's Form Stipulated Protective Order, Local Civil Rules Appendix L that was followed almost to the letter in this case, accordingly provides for a good cause showing for nondisclosure of discovery materials.

In the opinion in the Barrio Brothers case, however, there would be no discussion of good cause.  In fact, a computer search shows that good cause was never mentioned in the opinion.  Implicitly, perhaps, the good cause shown for secrecy had to be shown by a rather undeserved devotion to the terms of an agreement made by the parties themselves:  "The Court expects the parties--and their attorneys--to abide by the Stipulated Protective Order to which they all agreed."  Barrio Brothers, 2021 WL 2463844, at *2 (emphasis in original). 

One other aspect of the parties' Stipulated Protective Order deserves attention, although it went unremarked in the District Judge's opinion.  In her description of the agreed order, the District Judge recounted that the lawyers would decide in the first instance what is "confidential" and so deserving of protection from the federal court.

If one category of confidentiality was insufficient in the lawyers' eyes to protect against disclosure, then they agreed to two options.  One was to prohibit disclosure to parties and employees of a party after filing a motion or a further stipulation.  This option was mentioned by both the Magistrate Judge and the District Judge, but it does not appear to have been considered by either of them in this case.

The parties' other agreed option in the event that they disputed the future disclosure of documents they had marked "confidential," was to limit disclosure "only" to identified "in-house counsel or party representatives."  In fact, the District Judge's opinion points out in passing that the Magistrate Judge "concluded that it was proper to 'leave it to the lawyers to decide whether the licensing agreements warrant this additional protection.'"  Barrio Brothers, 2021 WL 2463844, at *1.

This is problematical.  Courts including in the Sixth Circuit have rejected the idea that lawyers can confer discretion upon themselves to determine "confidentiality" in litigation.  See, e.g., In re National Prescription Opiate Litigation, 927 F.3d at 929-30;  Brown & Williamson Tobacco Corp. v. F.T.C., 710 F.2d 1165, 1180 (6th Cir. 1983) (holding that a “confidentiality agreement between the parties does not bind the court in any way”), cert. denied, 465 U.S. 1100, 104 S. Ct. 1585 (1984).

In the end, using a Form Appendix attached to the Local Rules may not achieve the result the lawyers intend in any given case.  There was nothing wrong with the Local Civil Rules Appendix L, the form Stipulated Protective Order in this case, for example.  It is worth noting that the District Judge in this case received a federal judicial commission in June 2019, so she is relatively new to the federal bench.

Whatever the reason for the rulings in this case, it is pretty clear that if the Form Stipulated Protective Order written in the Local Rules had been observed by the bench as closely as it was observed by the bar in this case, the result may have been no different but it is certain that "good cause" and not contract obedience would have been the focus of the judicial inquiry.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

P.S. TIMES TWO TO FACEBOOK CASE.

Earlier this week I posted an article on this Blog about the decision in a Facebook case, In re:  Facebook, Inc. Consumer Privacy User Profile Litig., No. 18-md-02843-VC (JSC), 2021 WL 3209711 (N.D. Cal. July 29, 2021) (USMJ).  Here is a link to the article:  https://insuranceclaimsbadfaith.typepad.com/insurance_claims_badfaith/2021/08/usmj-protects-facebooks-cambridge-analytica-documents-in-the-public-record.html.

    I thought about two more things regarding that decision, thus this postscript times two.  One thing is that the Magistrate Judge "grant[ed] Facebook's request to modify" a protective order entered earlier in that Multidistrict Litigation (MDL).  She did more than modify an order by granting Facebook's request, however.  Facebook asked the Magistrate Judge to change the scope of "the protections conferred by this Stipulation and Order," and she did.  In re Facebook, 2021 WL 3209711, at *4.

    So we have one party to the Stipulation in this case changing the parties' Stipulation, and we also have the Magistrate Judge changing it.  My understanding of a stipulation while practicing law for 43 years is that it always, without exception, takes all parties to the stipulation to change it.  If all the parties do not agree on what it says, then the thing is not a stipulation.  It is something else, something  as to which a Magistrate Judge can enter an order changing it, but it is not a stipulation no matter how many times they call it that.

    The second reason for this Postscript is this:  To say again what was said in the original article, the information at issue was already in the public domain.  It apparently was part of an NBC News report "that released almost 7,000 pages of the disclosed Facebook documents, including the 46 documents at issue here."  In re Facebook, 2021 WL 3209711, at *2.  The fact that they were "disclosed" was a matter for the San Mateo County Superior Court in California.  The case in which the Facebook documents were disclosed, apparently in violation of that court's protective order, is pending in that court.   It is not pending in the federal court where the MDL is centered.  It is not the job of any judicial officer in the federal court MDL to enforce orders entered by the San Mateo County Superior Court (which in any event seems fully capable of taking care of  the matter itself).

    Especially when one of the federal judicial officials rules in the MDL that "it is undisputed that the 46 documents were part of the public domain at the time of designation and were not disclosed in violation" of the stipulated protective order in the federal court proceeding.  In re Facebook, 2021 WL 3209711, at *4.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

USMJ PROTECTS FACEBOOK'S CAMBRIDGE ANALYTICA DOCUMENTS IN THE PUBLIC RECORD.

"In 2016, Facebook produced one million pages of confidential documents" pursuant to a protective order entered in The San Mateo County Superior Court in California.  Facebook's production included 46 documents later at issue in a Multidistrict Litigation centered in California in 2021.  "These documents were later disclosed in violation" of the protective order entered by the California State Court.  In re Facebook, Inc. Consumer Privacy User Profile Litig., No. 18-md-02843-VC (JSC), 2021 WL 3209711, at *1 (N.D. Cal. July 29, 2021) (Corley, USMJ).

          The Facebook documents were disclosed by lawyers and parties who asserted that the documents were relevant to the Cambridge Analytica investigation.  They communicated with various media outlets about the documents.  The media outlets included The Washington Post newspaper, The Guardian newspaper, and NBC News.  NBC "published a report that released almost 7,000 pages of the disclosed Facebook documents, including the 46 documents at issue here."  In re Facebook, 2021 WL 3209711, at *2.

          The MDL (federal) court approved a Stipulated Protective Order in "August 2018," and sometime in 2019 "Plaintiffs obtained public versions of the at-issue 46 documents from the NBC News website."  In re Facebook, 2021 WL 3209711, at *3.  On March 15, 2019, the San Mateo County Superior Court wrote -- even before this happened, finding that the Plaintiffs were responsible for violating its protective order -- that the Plaintiff's conduct "'compromises the entire integrity'" not only of Stipulated Protective Orders, but all of "'American jurisprudence.'"  In re Facebook, 2021 WL 3209711, at *4.

          There is no indication how a California State Court and an MDL centered in a federal court in California could have simultaneously had jurisdiction, but they apparently did.  Without getting overly technical, it is fair to say that both courts were pissed.

          In any case, the Magistrate Judge in the MDL wrote several things that, respectfully, do not quite add up.  First, the Magistrate Judge wrote that she issued "the operative stipulated Protective Order" in August 2018 in the MDL  In re Facebook, 2021 WL 3209711, at *3.  A court never issues a Stipulated Protective Order; the parties stipulate to it.  The court approves it, modifies it, or rejects it, but no court anywhere ever "issues" it.

          Second, the Magistrate Judge loosely described the default presumption of public access to court records as "a general rule," and said that a finding of good cause is "generally" required before a court can enter a protective order but that "a court need not do so if the  parties stipulate to entry of a protective order," citing to a Ninth Circuit decision in 2002 which says no such thing.

          There is no such "general rule," it is a default presumption, and good cause is always required by Federal Rule of Civil Procedure 26(c), as well as by the Ninth Circuit Court of Appeals. 

          Third and finally, to her credit the Magistrate Judge recognized that the materials at issue, which irrespective of how they got there, were and are already in the public domain and so they are just not covered by the Stipulated Protective Order which she approved.  She accordingly held that the documents in question in the MDL were in the public domain at the time that Microsoft designated them as "Confidential--Attorney's Eyes Only" in the MDL, and "under the [MDL, Stipulated] Protective Order's plain terms, the documents are not covered."  In re Facebook, 2021 WL 3209711, at *4.

           Unfortunately, the Magistrate Judge did not end with this conclusion.  The Magistrate Judge granted Facebook's motion to modify the SPO -- which in its original iteration did not touch the materials at issue -- so that the order would now reach the material in the public domain anyway:

Accordingly, the Court grants Facebook’s request to modify paragraph 3(a) of the Protective Order as follows (additional language in italics):

However, the protections  conferred by this Stipulation and Order do not cover the following information: (a) any information that is in the public domain at the time of disclosure to a Receiving Party or becomes part of the public domain after its disclosure to a Receiving Party as a result of publication not involving a violation of this Order or another court’s protective order, including becoming part of the public record through trial or otherwise.

In re Facebook, 2021 WL 3209711, at *4 (italics by the Magistrate Judge, and, apparently, by Facebook).

          Who says you can't get a do-over in court?

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BOTH THE SUBSTANCE AND THE PROCEDURE OF THE THING.

In Obertman v. Electrolux Home Care Prod's, Inc., No. 2:19-cv-02487-KJM-AC, 2021 WL 2823072 (E.D. Cal. July 7, 2021), the Court outlined both the substance and the procedure of sealing court records from public view.

            The Court concisely summarized the current law undergirding the strong, constitutional presumption of public access to court records at the beginning of its opinion.  First, the Court repeated the basic point that only judges, and not the parties or their lawyers, decide what the public can and cannot see in the records of courts.  Obertman, 2021 WL 2823072, at *1.

            Then the Court listed the substantive reasons that are currently recognized as justification for denying the public access to court records despite the default presumption that access is ordinarily required:

• Protect against promoting either private spite or public scandal;
• Protect courts from being repositories of libel; and
• Protect “'sources of business information that might harm a litigant’s competitive standing.'”

Obertman, 2021 WL 2823072, at *1.

            After repeating the substance of the presumption of public access and outlining the exceptions to that default presumption, the Court addressed the procedures widely employed for parties and their lawyers to request an exception and deny public access to court records.

            In this case, the Court summarized the procedures extant in the Ninth Circuit in which this Court sits:

• First, the judge must put the underlying motion or other document or record, into a frame whereby the judge determines whether or not the record is “'more than tangentially related to the merits of a case.'”
• If for example a motion is involved, and if the underlying motion is not tangential, then the inquiry stops because the presumption does not apply. The judge's analysis continues, however, if she finds that the underlying motion is "more than tangentially related to the merits of the case[.]"   When that determination is made, i.e., when the judge decides that the underlying motion is more than tangentially related to the merits of the case, then the party requesting to keep the record secret must provide evidence of "compelling reasons" for the secrecy.
• "Applying this standard, 'a court may seal records only when it finds 'a compelling reason and articulate[s] the factual basis for its ruling, without relying on hypothesis or conjecture,' and finds this reason outweighs the public’s interest and the presumption of public access."
• The requirement of a "compelling reasons" showing is not satisfied simply by citing to an earlier stipulated protective order, or by citing to any other previously entered "generalized protective order, including a discovery phase protective order." The requirement is satisfied instead by a showing related to the specific document or other court records as to which the party seeks to have the judge order the secrecy.

Obertman, 2021 WL 2823072, at *1.

            In the Obertman case, the request to seal judicial records concerned the plaintiff's motion to certify a class.  This motion was obviously more than tangentially related to the substance of the claim and so the "compelling reasons" requirement applied.

            The party requesting secrecy showed only that the parties in the case had all previously stipulated to a protective order.  This was hardly enough to overcome the presumption of public access to particular court records in that case.

            Among other things, the lawyers do not control the outcome of the secrecy question, the court controls that outcome.  Further, a mere stipulated protective order does not satisfy the required showing of compelling reasons to deny the public access to a specific court record.  Obertman, 2021 WL 2823072, at *2.

            Substance and procedure stated, and applied.  The Obertman decision does all of that in denying a request to bar public access to specific court records.  The presumption of public access to court records prevailed on this record.  The party seeking secrecy did not satisfy the prevailing requirement at this time, but it could try again.  "Accordingly, the request is denied, but with the possibility of renewal."  Obertman, 2021 WL 2823072, at *2 (emphasis by the Court).

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

COURTS WRITE LAW, OVERRIDE CONSTITUTION, FOR "SENSITIVE BUSINESS INFORMATION."

(NASA)

Courts are tending to keep documents and testimony a secret just so long as the parties claim it is "sensitive business information."  See, e.g., M3 USA Corp. v. Summer Qamoum, No. 20-2903 (RDM), 2021 WL 2324753, at *7 (D.C.D.C. June 7, 2021) ("The Court also entered a stipulated protective order, permitting the parties to safeguard their sensitive business information. Dkt. 20.").

          When entering a secrecy order, i.e., a protective order such as under Federal Rule of Civil Procedure 26(c), Courts have wide discretion.  However they do not have discretion to override the presumption of public access to Court records at will.

          Courts have to accommodate that presumption, to recognize it and to apply certain safeguards when the interests are balanced in favor of secrecy, including to limit disclosure rather than to bar disclosure entirely unless the case is so unique that no disclosure is required.  The presumption of public access to Court records is a presumption which comes from both the United States Constitution and common law (even though, in the federal system, there is not supposed to be such a thing as common law).

          Keeping "sensitive business information" confidential is really a creation of the lawyers for large corporations which want to keep such information a secret from the public.  Large corporations would face a risk of losing business otherwise.  Needless to say, "sensitive business information" is not protected from disclosure either by the Constitution or by Rules of Procedure; rather, it is protected from disclosure by a swiftly growing number of Courts and stipulations, as in this case. 

          For recent restrictions on secrecy orders, see for example the articles posted here on May 24 and on May 26, 2021.

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NO DISPUTE, CASE OR CONTROVERSY? NO BLANKET PROTECTIVE ORDER, EITHER.

In an article on May 24, a seminal decision on blanket protective orders was discussed here in terms of the Court's rulings on secrecy and the presumption of public access.  The case is AgJunction LLC v. Ag Leader Tech., Inc., No. CV-20-02204-PHX-SPL, 2021 WL 1969523 (D. Ariz. March 9, 2021).

    The Court in this case also raised the possibility of an argument that Federal Courts lack the jurisdiction to enter blanket protective orders in the absence of a case or controversy.  Here's why it did.

    The lawyers of record wrote a proposed order in that case that was so comprehensive it would have rewritten the Federal Rules of Civil Procedure, in effect.  The proposed order contained provisions keeping a litany of things secret:

Here, the Proposed Protective Order defines “confidential” material as “any information, document, or thing, or portion of any document or thing that contains: (1) trade secrets; (2) confidential business information, including contracts or license agreements with a third party where disclosure would violate a contractual obligation of confidentiality; (3) personal identifying information, such as a Social Security number; or (4) personal health information protected by the Health Insurance Portability and Accountability Act, of the Party or a Non-Party to whom the Party or Non-Party reasonably believes it owes an obligation of confidentiality with respect to such documents, information, or material.” (Doc. 15-2 at 2). This does not meet Rule 26(c)’s threshold.

AgJunction, 2021 WL 1969523, at *1.

    The parties agreed to this multi-faceted definition of "confidential;" the lawyers stipulated to it and proposed it to a Federal District Judge.  Their problem, however, was not in their language but two-fold, first in their lack of good cause for protection, as was discussed in the previous article here and mentioned in the above quotation.

    Their problem continued with their lack of a dispute, the lack of a case or controversy that cried out for the protection of a Federal Court.  Nothing in that case had yet reached the point of a request for production, a deposition question, an interrogatory, or any objections.  There was, to say again, no case or controversy to activate the Federal Court's Article III jurisdiction.  There was only the lawyers' proposed protective order in case there would be a case or controversy over discovery or evidence later in the case, but there was not a case or controversy at the time of this decision.  Their attempt to manage the possibilities in the case was no substitute for the reality that there was no present, actual, tangible case or controversy:

    Further, no party has shown that there is an actual dispute that commands Court intervention and protection. See Fed. R. Civ. P. 26(c)(1); LRCiv 7.2. The parties remain free to mutually enter into a written agreement to facilitate the exchange of confidential disclosures without court approval or supervision. And, in the event discovery mandates disclosure of specific, harmful, confidential material, the parties will not be precluded from presenting a request to the Court at that time in a manner tailored to protect the particular interests at hand. [Citation omitted.]      Accordingly,

    IT IS ORDERED that the parties’ Joint Motion to Stay (Doc. 15) is granted in part and denied in part. The Motion to Stay is granted and the Motion for Protective Order is denied.

 

AgJunction, 2021 WL 1969523, at*2 (emphasis by the Court).

    The Court in this case did not use the words, but there was no case or controversy over the stipulated proposal for a protective order.  There was no basis for a Federal Court to act.  Federal Courts are prohibited from giving advisory opinions, there is no doubt about that.  Blanket protective orders in the absence of a dispute over discovery or the production of evidence are nothing short of mere advisory opinions, there ought to be no doubt now about that.

 

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.