Litton Industries, Inc. v. Lehman Bros. Kuhn Loeb Inc.

122 F.R.D. 433, 1988 U.S. Dist. LEXIS 16034, 1988 WL 122247
CourtDistrict Court, S.D. New York
DecidedOctober 6, 1988
DocketNo. 86 Civ. 6447 (JMC)
StatusPublished
Cited by3 cases

This text of 122 F.R.D. 433 (Litton Industries, Inc. v. Lehman Bros. Kuhn Loeb Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Litton Industries, Inc. v. Lehman Bros. Kuhn Loeb Inc., 122 F.R.D. 433, 1988 U.S. Dist. LEXIS 16034, 1988 WL 122247 (S.D.N.Y. 1988).

Opinion

OPINION AND ORDER

NINA GERSHON, United States Magistrate:

Plaintiff moves for an order removing the designation “confidential” from the deposition testimony of defendants Levine and Sokolow. The designation was made by defendants’ counsel pursuant to a “Stipulation and Order Governing the Protection and Exchange of Confidential Information” (“the protective order”) agreed to by the parties and signed by me on February 17, 1987, which provides that counsel may designate as “confidential” any document or deposition testimony that counsel “in good faith considers to contain or reflect a trade secret or research, development, financial, commercial or business or other information which the producing party deems confidential.” Under the order, upon designation as “confidential,” use and dissemination of the material are limited.

Since the order was not based upon a prior adjudication that the materials to be produced in discovery were in fact entitled to confidential treatment, the order provides, in paragraph 1, that, “Any party may, at any time, request that a document or information be removed from the ‘CONFIDENTIAL’ designation and, if the other party objects, seek relief under the Federal Rules of Civil Procedure pursuant to paragraph 8 below.” Paragraph 8 provides that “Any party needing relief from the provisions of this Stipulation and Order .,. may, if agreement cannot be reached among the parties, seek relief from this Court, upon at least seven business days’ notice to the other parties.”

At issue now are confidentiality designations made by defendants’ counsel as to assertions of the Fifth Amendment by defendants Sokolow and Levine at their depositions. Defendant Sokolow declined, on [434]*434Fifth Amendment grounds, to answer any questions put to him at his deposition. Defendant Levine invoked the Fifth Amendment as to many questions but answered others. On oral argument plaintiffs counsel stated that plaintiff had no interest in the unsealing of the answers given, but was interested only in the unsealing of those portions of Levine’s deposition where he declined to answer on Fifth Amendment grounds. See transcript of March 28, 1988 at 43-45.

In support of the confidentiality designations, defendants’ counsel argue that their clients’ reliance on the Fifth Amendment might be embarrassing. No authority is offered that would suggest that an assertion of the Fifth Amendment meets the standards for the imposition of a protective order under Rule 26(c) of the Federal Rules of Civil Procedure. Whatever might be said if both defendants were not already convicted felons, under the circumstances presented here, it is difficult to discern any significant embarrassment that could reasonably be said to arise from their assertion of the Fifth Amendment in these proceedings.

Plaintiff, for its part, asserts that it is seeking information from non-party sources, particularly in the Congress, who it hopes will be more forthcoming if plaintiff can demonstrate that it has been foreclosed from getting information directly from defendants. The record supports the conclusion that plaintiff is acting in good faith, for the purpose asserted, in seeking removal of the designations at this time.

Perhaps because their arguments as to why their deposition testimony should be treated as confidential are so weak, defendants argue principally that the burden is on plaintiff to upset the designations, and that that burden is a heavy one which plaintiff cannot meet, particularly in light of the defendants’, “reliance” on their designations of confidentiality. In support of their position, defendants rely upon a line of cases exemplified by Martindell v. International Tel. & Tel. Corp., 594 F.2d 291 (2d Cir.1979).

This reliance is wholly misplaced. In Martindell, the district court had entered a protective order allowing certain civil depositions of defendants and non-parties to be taken under seal, which order had facilitated the obtaining of testimony and had rendered unnecessary the invocation by the witnesses of their Fifth Amendment rights. The Court of Appeals for the Second Circuit upheld the district court’s denial of the request of the Government, a non-party to the civil suit, for unsealing. The court referred to the vital function of protective orders in securing the just, speedy and inexpensive determination of civil disputes “by encouraging full disclosure of all evidence that might conceivably be relevant.” Id. at 295. It was in that context that the Court of Appeals stated (Id. at 295-96):

“Unless a valid Rule 26(c) protective order is to be fully and fairly enforceable, witnesses relying upon such orders will be inhibited from giving essential testimony in civil litigation, thus undermining a procedural system that has been successfully developed over the years for disposition of civil differences. In short, witnesses might be expected frequently to refuse to testify pursuant to protective orders if their testimony were to be made available to the Government for criminal investigatory purposes in disregard of those orders.”

The Court of Appeals then weighed the needs of the Government against the interests protected by the order and, citing GAF v. Kodak, 415 F.Supp. 129, 132 (S.D.N.Y.1976), emphasized that “ 'the Government as investigator has awesome powers’ which render unnecessary its exploitation of the fruits of private litigation.” 594 F.2d at 296. In conclusion, after balancing the interests, the court stated that “we a"e satisfied that, absent a showing of improvidence in the grant of a Rule 26(c) protective order or some extraordinary circumstance or compelling need, none of which appear here, a witness should be entitled to rely upon the enforceability of a protective order against any third parties, including the Government____” Id.

In sum, in Martindell the district court had determined that certain discovery was

[435]*435entitled to protection from third parties, in particular government agencies, and, in reliance upon the protective order, discovery in the civil case, which was otherwise unavailable, was obtained. Under those circumstances, the court of appeals imposed a heavy burden upon the Government to upset the protective order. The identical principles are at work in the other cases relied upon by the defendants. Thus, in Minpeco S.A. v. Conticommodity Services, 832 F.2d 739, 742 (2d Cir.1987), where the court of appeals applied the “compelling need” test, the district court had fully evaluated the question whether the plaintiffs in that case should be permitted to make the discovery produced available to non-party government agencies before entering the protective order which the Government, a non-party, later sought to overturn. Similarly, in Palmieri v. State of New York, 779 F.2d 861, 864-65 (2d Cir.1985), the court noted the parties’ reliance on the secrecy of settlement discussions, which reliance had formed the basis for the magistrate’s sealing orders, when applying the “compelling need” standard to the application of the State, a non-party, for unsealing. Accord Federal Deposit Ins. Corp. v. Ernst & Ernst,

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Litton Industries, Inc. v. Lehman Bros. Kuhn Loeb Inc.
734 F. Supp. 1071 (S.D. New York, 1990)

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122 F.R.D. 433, 1988 U.S. Dist. LEXIS 16034, 1988 WL 122247, Counsel Stack Legal Research, https://law.counselstack.com/opinion/litton-industries-inc-v-lehman-bros-kuhn-loeb-inc-nysd-1988.