Braun Corp. v. Vantage Mobility International LLC

265 F.R.D. 330, 2009 U.S. Dist. LEXIS 98589
District Court, N.D. Indiana·Decided October 21, 2009·No. Cause No. 2:06-CV-50-JVB-PRC·Published·Cited by 3 cases

Opinion

OPINION AND ORDER

PAUL R. CHERRY, United States Magistrate Judge.

This matter is before the Court on Defendant’s Motion to Modify Stipulated Protective Order [DE 135], filed on September 8, 2009. Plaintiff filed a response brief in opposition to the instant Motion on September 28, 2009, and Defendant filed a reply brief in support on October 13, 2009. On October 20, 2009, with leave of Court, Plaintiff filed a sur-reply brief.

On February 10, 2006, Plaintiff filed a Complaint for Patent Infringement against Defendant. On January 16, 2007, the Court entered a Stipulated Protective Order, which contains a “CONFIDENTIAL or ATTORNEYS’ EYES ONLY” provision, permitting either party to designate confidential business information and trade secrets under these categories. See Protective Order, at ¶ 3(a) [DE 51]. In particular, paragraph 3(b) of the Protective Order provides that:

A Party or producing person shall designate information as ATTORNEYS’ EYES ONLY only when the designating Party or person in good faith believes broader disclosure of the “protected information” will harm its competitive position if known by a Party or person other than the designating Party or person and the attorneys (both outside counsel and, as identified in Paragraph 6(a)(iv), in-house counsel) and their respective employees and staff who are involved in this case.

Id. at ¶ 3(b) (emphasis added). Paragraph 6(a)(iv) further provides that access to information designated as “CONFIDENTIAL” shall be limited to a number of “Qualified Persons,” including Attorney Brad Johnston1, who is in-house counsel for Plaintiff. Paragraph 19 of the Protective order provides that:

In the event any Party hereto seeks a court order that in any way seeks to vary the terms of this Protective Order, said Party shall make such request in the form of a written stipulation, or noticed motion [332]*332to all Parties that must be served and filed in accordance with local court rules.

Id. at ¶ 19.

In the instant Motion, Defendant requests leave of Court to modify the Protective Order to create a new category of information designated as “OUTSIDE ATTORNEYS’ EYES ONLY,” which, in particular, would make information under this new category inaccessible to Attorney Johnston, but would remain accessible to Plaintiffs retained outside counsel and other individuals specified in the Protective Order. Defendant represents that its request is in response to Plaintiffs request that Defendant produce certain highly confidential sales and financial information about its business, which Defendant alleges would result in irreparable harm if disseminated to Plaintiff or any of Defendant’s competitors. In particular, Defendant argues that Attorney Johnston should be denied access to information concerning Defendant’s sales and finances because he also serves as Plaintiffs corporate secretary and is a member of its Board of Directors, thus increasing the chance that Attorney Johnston might inadvertently disclose the confidential information to the Plaintiff.

ANALYSIS

Just as good cause is required to enter a protective order, good cause is also required to modify a protective order. Murata Mfg. Co. v. Bel Fuse, Inc., 234 F.R.D. 175, 179 (N.D.Ill.2006). The party seeking to modify the protective order has the burden of demonstrating that good cause exists. Id. “This burden is especially high where a protective order is agreed to by the parties before its presentation to the court.” SmartSignal Corp. v. Expert Microsystems, Inc., No. 02 C 7682, 2006 WL 1343647, at *2 (N.D.Ill. May 12, 2006). When deciding whether to modify a protective order, courts consider the nature of the protective order, foreseeability at the time of issuance of the modification requested, parties’ reliance on the order, and whether good cause exists for the modification. Id.

In this case, the parties appear to have entered a blanket protective order, which permits the parties to protect selected documents that they believe in good faith contain “protected information.” See Protective Order at ¶ 3(a); Murata Mfg. Co., 234 F.R.D. at 179 (describing a “blanket” protective order as permitting the parties to select documents that should be protected). This type of protective order is difficult to modify when the parties have stipulated to it, especially where the proposed modification relates to a matter that was foreseeable when the parties’ entered into the original protective order. Id. at 179-80.

In its response brief, Plaintiff argues that Defendant should have known that Attorney Johnston would have access to highly confidential and sensitive information, as it agreed to permit him access to information under the “ATTORNEYS’ EYES ONLY” provision or the Protective Order, and having had the current Protective Order in effect for almost three years, cannot now attempt to bar him from reviewing sales and financial information. However, as Defendant addresses in its reply brief, the requested modification has been necessitated by the recent discovery disclosures, and not information that was previously disclosed. Therefore, the Court finds that Defendant’s request is not untimely and the requested modification was not foreseeable at the time the Court entered the Protective Order.2

When evaluating whether an attorney should have access to confidential materials, a court should weigh a party’s legitimate interest in ensuring that the information be protected against the other party’s competing interest in having its counsel have access to that information. Autotech Techs. Ltd. Partnership v. Automationdirect.com, Inc., 237 F.R.D. 405, 408 (N.D.Ill. 2006). In cases where in-house counsel is sought to be excluded from access to information, “status as in-house counsel cannot [333]*333alone create [the] probability of serious risk to confidentiality and cannot therefore serve as the sole basis for denial of access.” United States Steel Corp. v. United States, 730 F.2d 1465, 1469 (Fed.Cir.1984). “The sole question is whether there is an unacceptable risk of or opportunity for ‘inadvertent disclosure’ of confidential information.” Autotech Techs., 237 F.R.D. at 407. In deciding whether such a risk exists, “the factual circumstances surrounding each individual counsel’s activities, association, and relationship with a party, whether counsel be in-house or retained, must govern any concern for inadvertent or accidental disclosure” and must be determined “by the facts on a counsel-by-counsel basis.” United States Steel, 730 F.2d at 1468. Involvement of the attorney in “competitive decision-making” is one basis for limiting access to information. Autotech Techs., 237 F.R.D. at 408.

“In the end, proper analysis requires a careful and comprehensive inquiry into in-house counsel’s actual (not nominal) role in the affairs of the company, his association and relationship with those in the corporate hierarchy who are competitive decision-makers, and any other factor that enhances the risk of inadvertent disclosure.” Id. “That risk must then be balanced against the harm that will result to the party employing in-house counsel from restrictions on the latter’s access to the protected information.” Id.

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Braun Corp. v. Vantage Mobility International LLC, 265 F.R.D. 330, 2009 U.S. Dist. LEXIS 98589 (N.D. Ind. 2009).

265 F.R.D. 330 (Braun Corp. v. Vantage Mobility International LLC) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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