Global Material Technologies, Inc. v. Dazheng Metal Fibre Co.

133 F. Supp. 3d 1079, 92 Fed. R. Serv. 3d 1006, 2015 WL 1977527, 2015 U.S. Dist. LEXIS 127270
CourtDistrict Court, N.D. Illinois
DecidedSeptember 23, 2015
DocketNo. 12 CV 1851
StatusPublished
Cited by28 cases

This text of 133 F. Supp. 3d 1079 (Global Material Technologies, Inc. v. Dazheng Metal Fibre Co.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Global Material Technologies, Inc. v. Dazheng Metal Fibre Co., 133 F. Supp. 3d 1079, 92 Fed. R. Serv. 3d 1006, 2015 WL 1977527, 2015 U.S. Dist. LEXIS 127270 (N.D. Ill. 2015).

Opinion

MEMORANDUM OPINION and ORDER

Young B. Kim, United States Magistrate Judge

In this diversity suit involving the meltdown of an international business relationship, metal fiber manufacturer Global Material Technologies, Inc. (“GMT”) sued Dazheng Metal Fibre Co., Ltd. (“DNZ”) and Dazheng Metal Fibre Co., Ltd. d/b/a ChuanGuPing (“Tru Group”), both foreign corporations organized under Chinese law, and Chinese citizen Dong Jue Min (collectively, “the defendants”), alleging that DNZ and Tru Group misappropriated GMT’s trade secrets and used GMT’s confidential customer information to lure away its customers. The case is now approaching the end of the fact-discovery phase, during which GMT sought and received a number of documents that are designated as being for “Attorney’s Eyes Only.” Before the court are Plaintiffs Motion to Remove the “Attorneys’ Eyes Only” Designations on Certain Documents Produced by Tru Group, (R. 238), and Plaintiffs Motion to Remove the “Attorneys’ Eyes Only” Designations on Documents Produced by Third-Party Respondent Federal-Mogul Holdings Corporation, (R. 246). For 'the following reasons, the first motion is granted and the second motion is granted in part and denied in part:

Background

GMT originally filed this suit in the United States District Court for the Middle District of Tennessee. (R. 1.) In its amended complaint GMT identifies itself as a manufacturer of various metallic wool products that outsourced some of its manufacturing operations to DNZ from 2003 through 2007. (R. 38, Am. Compl. ¶¶ 8, 11.) GMT alleges that it was DNZ’s primary customer from 1996 through 2009 and that it had a 25% ownership interest in DNZ. (Id. ¶¶ 12-13.) It alleges that by way of this “unique business relationship” DNZ gained access to GMT’s confidential and proprietary customer information and competitive pricing strategies. (Id. ¶¶ 15, 18.) GMT alleges that DNZ eventually “usurped this information and used it to identify and contact GMT customers” and ultimately offered them “a pricing scheme based upon GMT’s confidential pricing scheme.” (Id. ¶ 19.) According to GMT, “DNZ, through Tru Group, and possibly through other subsidiary companies of DNZ, including but not limited to Sea-marky Industrial, Ltd., used (and still uses) its confidential knowledge of GMT’s pricing scheme in determining the pricing [1083]*1083scheme it offered (and still offers) to GMT customers.” (Id. ¶ 45.) These allegations form the basis of GMT’s claim that the defendants violated the Uniform Trade Secrets Act. (Id. ¶¶ 113-118.)

About a year after the suit was filed, the court in Tennessee entered a two-tiered protective order that had been agreed to by the parties. (R. 50.) The protective order limits the disclosure of confidential material — defined as “any document, testimony, statement and/or information produced pursuant to discovery requests and/or revealed during depositions in this matter” — to the parties, potential and retained expert witnesses, attorneys of record, and counsel’s staff personnel on a need to know basis. (Id. ¶¶ 1-2.) Additionally, the protective order allows the parties to designate confidential material as “attorneys’ eyes only” where:

the disclosing party and its counsel believe in good faith that the material contains proprietary information ... including but not limited to material 'constituting or containing trade secrets or other confidential research, development, financial, or commercial information, that the disclosing party reasonably believes is of such a nature and character that unlimited disclosure of such information to the receiving party will be harmful to the disclosing party or to its business or will provide the receiving party a competitive advantage over the disclosing party.

(Id. ¶ 3.) Three months after the court entered the protective order, in March 2012, the court granted DNZ’s motion to transfer the case to the Northern District of Illinois. (R. 67.) In the course of discovery this court recognized that the protective order entered in the Middle District of Tennessee “is still in full force and effect.” (R. 154.)

According to the briefs the parties submitted in connection with the current motions, in July 2014 Tru Group produced two groups of documents labelled with the attorneys’ eyes only (“AEO”) designation. The first group consists of email correspondence dated from October 2009 through April 2010 between a former Tru Group sales employee and third-party customer Federal-Mogul Corporation. (R. 238, Pl.’s Mem. at 2 & Sealed Ex. A.) The second group consists of about 60 pages of invoices dated from July 2010 through August 2011 between Tru Group and Federal-Mogul and its affiliates. (Id. at 2 & Sealed Ex. B.) Both groups of documents convey then-contemporaneous pricing information, payment terms, and general identification of product specification numbers. Additionally, during discovery Federal-Mogul has produced approximately 520 documents under the AEO designation consisting of invoices and communications conveying pricing, payment terms, testing, and product specifications for GMT, DNZ, and non-party Seamarky, along with internal Federal-Mogul documents that convey information regarding, among other things, its supplier selection process, pricing, and purchasing strategies. (R. 260, Federal-Mogul Resp. at 4.) In the current motions,, GMT seeks an order removing the AEO designation from the documents produced by the defendants and Federal-Mogul, arguing that the “confidential” designation is sufficient to protect their legitimate interests.

Analysis

Federal Rule of Civil Procedure 26(c)(1) allows a court to, “for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including ... (G) requiring that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way.” But because there is a “presumption of [1084]*1084public access to discovery materials,” the court is required to make a good-cause determination before entering a protective order shielding relevant information from public disclosure. Citizens First Nat’l Bank of Princeton v. Cincinnati Ins. Co., 178 F.3d 943, 946 (7th Cir.1999). As the Seventh Circuit has recognized, “[m]any a litigant would prefer that the subject of the case — how much it agreed to pay for the construction of a pipeline, how many tons of coal its plant uses per day, and so on — be kept from the curious (including its business rivals and customers), but the tradition that litigation is open to the public is of very long standing.” Union Oil Co. of Cal. v. Leavell, 220 F.3d 562, 567 (7th Cir.2000). Accordingly, the party seeking a protective order must show specific facts showing good cause to justify the protective order. Culinary Foods, Inc. v. Raychem Corp., 151 F.R.D. 297, 300, 303 (N.D.Ill.1993).

Once a protective order has been entered, the party seeking to protect documents under its shield “must continue to show good cause for confidentiality when challenged.” In re: Bank One Securities Litig. First Chi. Shareholder Claims, 222 F.R.D. 582, 586 (N.D.Ill.2004).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
133 F. Supp. 3d 1079, 92 Fed. R. Serv. 3d 1006, 2015 WL 1977527, 2015 U.S. Dist. LEXIS 127270, Counsel Stack Legal Research, https://law.counselstack.com/opinion/global-material-technologies-inc-v-dazheng-metal-fibre-co-ilnd-2015.