County Council v. SHL Systemhouse Corp.

182 F.R.D. 161, 1998 U.S. Dist. LEXIS 13790, 1998 WL 596054
District Court, E.D. Pennsylvania·Decided September 3, 1998·No. No. Civ.A. 98-0088·Published·Cited by 2 cases

Opinion

MEMORANDUM AND ORDER

JOYNER, District Judge.

Presently before the Court is Defendant, SHL Systemhouse Corp.’s (“Systemhouse” or “Defendant”), Motion for Protective Order requesting that Systemhouse’s documents containing proprietary business and technological information be protected from dissemination to the public and to Systemhouse’s competitors. For the following reasons, the motion is granted in part and denied in part.

BACKGROUND

Systemhouse contracted with Northampton County (the “County”) to provide emergency 911 services. Since Systemhouse went “live” with the 911 services on July 30, 1997, the County has had numerous complaints and problems with the system and numerous disputes with Systemhouse over the contract provisions, including whether a County representative could have unfettered access to the Systemhouse Communication Center. These disputes have spawned the instant litigation. Currently, the case is in the discovery phase and Systemhouse is concerned that if it provides the County with the requested information without a confidentiality agreement in place, the County will disseminate this information to Systemhouse’s competitors. Systemhouse seeks to protect the following categories of information from public dissemination:

1) Technical equipment specifications and pricing information not publicly available and generally limited to System-house personnel;
2) Technical selection criteria utilized by Systemhouse for equipment relating to the Northampton County Communications Center (the “Communications Center”);
3) Technical information relating to the interaction of the Communications Center equipment with other Systemhouse equipment;
4) Profit and profit margin information relating to the Communications Center;
5) Cost information relating to the Communications Center;
6) Pricing information relating to the Communications Center;
7) Staffing analyses and projections relating to the Communications Center;
8) Project management analyses, projections, plans and techniques relating to the Communications Center;
9) Non-public personnel and recruiting files;
10) Non-public documents (including those from, to and relating to Rural/Metro Corporation) relating to system integration or otherwise relating to matters outside of the Communications Center; and
11) Proprietary training and procedures files in cases where Systemhouse takes steps to keep these files, rules or procedures private and not generally available to the public.

(Def.’s Mem. at Ex. A).

DISCUSSION

Federal Rule of Civil Procedure 26(c)(7) provides that a court, “for good cause shown,” can order that “a trade secret or other confidential research development, or commercial information not be revealed or be revealed only in a designated way.” Fed. R.Civ.P. 26(c)(7). Our Court of Appeals has determined that

“Good cause is established on a showing that disclosure will work a clearly defined and serious injury to the party seeking closure. The injury must be shown with specificity.” Publicker Indus., Inc. v. Cohen, 733 F.2d 1059, 1071 (3d Cir.1984). “Broad allegations of harm, unsubstantiated by specific examples or articulated reasoning,” do not support a good cause showing. Cipollone v. Liggett Group, Inc., 785 F.2d 1108, 1121 (3d Cir.1986), cert. denied, 484 U.S. 976, 108 S.Ct. 487, 98 L.Ed.2d 485 (1987). The burden of justifying the confidentiality of each and every document sought to be covered by a protective order [163] remains on the party seeking the order.
Id. at 1122.

Pansy v. Borough of Stroudsburg, 23 F.3d 772, 786-87 (footnote omitted).

The federal courts have adopted a balancing approach to determine whether good cause has been shown. The following factors should be considered:

1) whether disclosure will violate any privacy interests;
2) whether the information is being sought for a legitimate purpose or for an improper purpose;
3) whether disclosure of the information will cause a party embarrassment;
4) whether confidentiality is being sought over information important to public health and safety;
5) whether the sharing of information among litigants will promote fairness and efficiency;
6) whether a party benefitting from the order of confidentiality is a public entity or official; and
7) whether the case involves issues important to the public.

Glenmede Trust Co. v. Thompson, 56 F.3d 476, 483 (3d Cir.1995) (quoting Pansy, 23 F.3d at 787-91). “Whether this disclosure will be limited depends on a judicial balancing of the harm to the party seeking protection (or third persons) and the importance of disclosure to the public.” Pansy, 23 F.3d at 787 (citing Arthur R. Miller, Confidentiality, Protective Orders, and Public Access to the Courts, 105 Harv.L.Rev. 427, 435 (1991)).

Systemhouse argues that its privacy interests are at stake because if the information is made available to the public, they will be at a “grave competitive disadvantage.” (Def.’s Mem. at 5). Systemhouse contends that the County will give its proprietary information to Systemhouse’s competitors who are currently bidding to take over provision of 911 services in the County. Systemhouse also argues that the County seeks this information to help it choose Systemhouse’s replacement, which Systemhouse maintains is an improper purpose.

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County Council v. SHL Systemhouse Corp., 182 F.R.D. 161, 1998 U.S. Dist. LEXIS 13790, 1998 WL 596054 (E.D. Pa. 1998).

182 F.R.D. 161 (County Council v. SHL Systemhouse Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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