Nutratech, Inc. v. Syntech (SSPF) International, Inc.

242 F.R.D. 552, 68 Fed. R. Serv. 3d 12, 2007 U.S. Dist. LEXIS 40170, 2007 WL 1424859
CourtDistrict Court, C.D. California
DecidedMarch 20, 2007
DocketNo. CV 06-03709GAF
StatusPublished
Cited by78 cases

This text of 242 F.R.D. 552 (Nutratech, Inc. v. Syntech (SSPF) International, Inc.) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nutratech, Inc. v. Syntech (SSPF) International, Inc., 242 F.R.D. 552, 68 Fed. R. Serv. 3d 12, 2007 U.S. Dist. LEXIS 40170, 2007 WL 1424859 (C.D. Cal. 2007).

Opinion

SEGAL, United States Magistrate Judge.

I. Introduction

On February 5, 2007, Plaintiff Nutratech, Inc. (“Plaintiff’ or “Nutratech”) filed a Motion for Entry of Protective Order (the “Motion”). Plaintiff and Defendant Syntech (SSPF) International Inc. (“Defendant” or “Syntech”) submitted a Joint Stipulation, pursuant to Local Rule 37-2, reflecting each party’s position regarding the Motion. The parties also submitted various declarations and exhibits. On February 13, 2006, each party submitted a Supplemental Memorandum, pursuant to Local Rule 37-2.3, and Plaintiff filed Evidentiary Objections.1 On February 27, 2007, Plaintiff filed copies of Defendant’s discovery responses. For the reasons stated below, the Court DENIES the Motion.

II. Federal Rule of Civil Procedure 26(c) Provides For the Entry of a Protective Order Upon a Showing of Good Cause

The Ninth Circuit addressed the issue of confidentiality in discovery and the role of protective orders in Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122 (9th Cir.2003). The Foltz court recognized the general rule that for a court to enter a protective order, the court must “identify and discuss the factors it considered in its ‘good cause’ examination to allow appellate review of the exercise of its discretion.” Foltz, 331 F.3d at 1130 (quoting Phillips v. Gen. Motors Corp., 307 F.3d 1206, 1212 (9th Cir.2002)). A party asserting good cause bears the burden of showing that specific prejudice or harm will result from the disclosure of each document (or item of information) that it seeks to protect. Id.

It is well-established that the “fruits of pre-trial discovery are, in the absence of a court order to the contrary, presumptively public. Rule 26(e) authorizes a district court to override this presumption where ‘good cause’ is shown.” San Jose Mercury News, Inc. v. U.S. Dist. Ct., 187 F.3d 1096, 1103 (9th Cir.1999) (internal citations omitted). Rule 26(c)(7) provides for a protective order upon a showing “that a trade secret or other confidential research, development or commercial information not be revealed or be revealed only in a designated way.”

In the present case, both parties agree that the materials in dispute should be subject to a protective order. (Jt. Stip. at l).2 However, Defendant argues that certain information (overall sales and revenue figures, customer/supplier lists) must be subject to an “attorney’s eyes only” provision so that this information will not be directly shared with anyone except Plaintiffs attorneys or experts. (Jt. Stip. at 3). Plaintiff argues that the client, Robert Green, President of Nutra-tech, must be allowed to review the materials in order to properly prepare Plaintiffs case. (Jt. Stip. at 1-2).

To obtain a protective order, the party resisting discovery or seeking limitations must, under Rule 26(c), show good cause for its issuance. Specifically, the moving party must make a clear showing of a particular and specific need for the order. Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir.1975). In the case of trade secrets, the moving party must show (a) that the information is a “trade secret or other [555]*555confidential research, development, or commercial information,” under Rule 26(c)(7) and (b) that its disclosure would be harmful to the party’s interest in the property. Centurion Indus., Inc. v. Warren Steurer & Assoc., 665 F.2d 323, 325 (10th Cir.1981); In re Agent Orange Prod. Liab. Litig., 104 F.R.D. 559, 574 (E.D.N.Y.1985). The burden then shifts to the party seeking discovery to show that the information is relevant to a party’s claims or defenses or the subject matter of the lawsuit and is necessary to prepare the case for trial. Centurion Indus., 665 F.2d at 325-26.

Where trade secrets or other confidential commercial information is involved, the court will balance the risk of disclosure to competitors against the risk that a protective order will impair prosecution or defense of the claims. Brown Bag Software v. Symantec Corp., 960 F.2d 1465, 1470 (9th Cir.1992). The court may order that the trade secret or commercial information not be revealed or be revealed only in a designated way. Fed. R.Civ.P. 26(c)(7). Disclosure may be ordered to opposing party’s trial attorney only (and not to the opposing party). Safe Flight Instrument Corp. v. Sundstrand Data Control, Inc., 682 F.Supp. 20, 22 (D.Del.1988).3

Courts commonly issue protective orders limiting access to sensitive information to counsel and their experts.4 See Vesta Corset Co., Inc. v. Carmen Found., Inc., 1999 WL 13257, at *3 (S.D.N.Y.1999). These protective orders represent judicial efforts to strike a proper balance between “the philosophy of full disclosure of relevant information” and the need for “reasonable protection against harmful side effects,” such as the risk that disclosure will result in competitive harm. Davis v. AT & T Corp., 1998 WL 912012, at *2 (W.D.N.Y.1998).

III. Defendant Has Demonstrated Good Cause For a Protective Order That Limits Disclosure of Certain Information to “Attorney’s Eyes Only”

As noted above, courts have ordered that documents be disclosed subject to an “attorney’s eyes only” restriction. Here, Defendant has demonstrated that it will suffer competitive harm if its customer and supplier lists are disclosed directly to the president of Nutratech, Robert Green. (Declaration of Bo Zhu, HI 8-10). Although Nutratech argues that it is not in direct competition with Syntech, it nonetheless admits that it sells the same product, citrus aurantium. (Declaration of Robert Green compare H2 with H 8). Also, throughout its proposed protective order, Nutratech describes the parties as “competitors.” (Jt.Stip, Exh. 1). Although Nutratech asserts that it currently sells to different buyers, this assertion does not mean that Nutratech will not choose to become a direct competitor of Syntech in the future. Syntech’s fear of competitive harm from the disclosure of its supplier and customer lists to the president and owner of Nutratech, rather than counsel, is legitimate.

Plaintiffs claim that the prosecution of its case will be impaired if this information is restricted to “attorney’s eyes only” is not persuasive. In his declaration, Mr. Green states the following:

[556]*556“I must know the identity of Syntech’s suppliers and customers [in order to] assist, advise and direct Nutratech’s counsel with the direction and conduct of discovery, and with litigation strategy.”

(Green Dec. H 6).

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242 F.R.D. 552, 68 Fed. R. Serv. 3d 12, 2007 U.S. Dist. LEXIS 40170, 2007 WL 1424859, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nutratech-inc-v-syntech-sspf-international-inc-cacd-2007.