Phillips Petroleum Co. v. Rexene Products Co.

158 F.R.D. 43, 32 U.S.P.Q. 2d (BNA) 1839, 1994 U.S. Dist. LEXIS 18045, 1994 WL 556926
CourtDistrict Court, D. Delaware
DecidedAugust 3, 1994
DocketCiv. A. No. 90-208-LON
StatusPublished
Cited by4 cases

This text of 158 F.R.D. 43 (Phillips Petroleum Co. v. Rexene Products Co.) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Phillips Petroleum Co. v. Rexene Products Co., 158 F.R.D. 43, 32 U.S.P.Q. 2d (BNA) 1839, 1994 U.S. Dist. LEXIS 18045, 1994 WL 556926 (D. Del. 1994).

Opinion

ORDER

TROSTLE, United States Magistrate Judge.

The parties have presented through letter memoranda the discovery issue of whether Rexene’s Chief Executive Officer, Andrew Smith, should be added to the Protective Order in this action. Despite the parties’ continued efforts, they have been unable to resolve this issue.

Background

The original Protective Order was signed by the Honorable Joseph J. Longobardi on April 11, 1991. This Order was a result of negotiations by the parties with the understanding that documents would be produced containing confidential information within the meaning of Fed.R.Civ.P. 26(c) (D.I. 39, 56). This present litigation is part of more than eleven years of litigation involving polypropylene-related patents. The particular Protective Order in question parallels protective orders that were employed in the related litigation of Phillips Petroleum Co. v. United States Steel Corp., 673 F.Supp. 1278 (D.Del. 1987), aff'd., 865 F.2d 1247 (Fed.Cir.1989) and Phillips Petroleum Co. v. Rexene Corp., C.A. No. H86-3241 (S.D.Tex.). During the process of this litigation, the parties have produced hundreds of thousands of confidential documents in reliance upon the Protective Order entered in this case, as well as the related litigation, with many of the documents being used in more than one case.

Throughout the time in which the present Stipulated Protective Order was negotiated, Mr. Smith was the CEO of Rexene. During those negotiations, there is no indication that Rexene ever suggested that Mr. Smith be permitted access to the confidential documents covered by the Stipulated Protective Order. However, the Chief Operating Officer, Dr. Lavon Anderson, who has served on Rexene’s Board of Directors since February 26, 1990 has always been included as one of the business/technical individuals having access to the confidential information.

During the course of this litigation, Rexene entered and emerged from Chapter 11 bankruptcy proceedings and has experienced numerous organizational and personnel changes. During the same time period, Phillips also experienced personnel changes. As a result, in early 1994, both parties agreed to update the Protective Order by amending it. The remaining disagreement concerning the amendment is Phillips’ refusal to agree to the addition of Rexene’s CEO to the Protective Order.

The remaining liability issue in this matter is whether Rexene’s license under the ’851 Patent remains in effect. Therefore, the case generally does not involve confidential information in the form of proprietary scientific of technical material. Rather, the confidential documents that Phillips seeks to protect deal with business related issues, including, Phillips’ licenses and related correspondence with third parties.

Rexene’s Arguments

In support of its position that Mr. Smith should be included in the Protective Order, Rexene makes the following arguments:

1. Rexene, a relatively small company, requires its legal department to report di[45]*45rectly to its CEO, thereby requiring members of Rexene’s in-house legal department to be in a position to discuss the issues of potential liability, damages and settlement with the CEO in a substantive, meaningful manner.

2. Mr. Smith, as a CEO, is the individual at Rexene ultimately responsible for making business decisions concerning this action and recommending appropriate courses of action to the Board of Directors. By restricting disclosure of information to Mr. Smith, normal attorney-client consultation between Mr. Smith and his attorneys would be severely limited.

3. Since most of the Phillips’ documents relating to third-party licensees date back to the early to mid-1980’s, they are “ancient history” in terms of the polypropylene business.

4. Since business people of both parties have been allowed access to the confidential information, no legitimate argument exists in not allowing Mr. Smith to be added to the list.

5. Phillips’ argument that it cannot divulge confidential information to Mr. Smith due to the confidentiality agreements with third-parties is without merit because the same confidential information at issue has already been supplied to Rexene personnel currently covered by the Protective Order.

6. Any suggestion that Mr. Smith would be incapable of maintaining Phillips’ information in confidence consistent with the terms of the Protective Order is unfounded and insulting.

Phillips’ Arguments

In support of its position that the Protective Order should not be modified to include Mr. Smith, Phillips argues as follows:

1. Throughout the negotiations of the original Protective Order, Rexene never suggested that Mr. Smith be permitted access to the confidential documents so covered. Further, Rexene did not insist to include its other CEOs on previous protective orders in the other related litigations between the parties.

2. None of the stipulated protective orders in any of the actions have allowed either of the parties’ chief decision makers access to any of the confidential information produced by the other. Phillips argues since they are rivals in a highly competitive market, disclosing sensitive business matters, such as production figures for certain polypropylene products, as well as information relating to competitor’s costs and business activities that ultimately effect the pricing of competing polypropylene products would be inappropriate.

3. As a result of being the owner and licensor of the patent in suit, all polypropylene producers report to Phillips their quarterly production and importation figures, paying royalties on the basis of such figures. The information provided by polypropylene producers was done so with the understanding that Phillips would keep it confidential, so that the specific production, importation and royalty information from the third-party polypropylene producers is unavailable from public sources. Such disclosure to Mr. Smith has the potential of influencing pricing and production decisions and upsetting the competitive market structure.

4. Contrary to Rexene’s arguments, Phillips contends that a large amount of the third-party information relates to production from the 1983 through 1994 period. Production by Phillips during this litigation has been made in reliance upon the previously entered Stipulated Protective Order.

In an attempt to compromise, Phillips made suggestions which would have allowed Mr. Smith access to certain, but not all of the confidential documents. Those suggestions were as follows:

1. To permit Mr. Smith access to any non-third-party-related documents produced by Phillips, subject to the provisions of the Stipulated Protective Order.

2. Allowing him access to certain specific confidential third-party documents on a limited basis, with Rexene identifying the specific documents to be shown to Mr. Smith, subject to the approval by Phillips’ counsel.

3. Any documents marked as deposition exhibits up to the present time could be [46]*46reviewed by Mr. Smith subject to the Stipulated Protective Order.

However, Rexene rejected these proposals for the following reasons:

1. By providing Phillips with a list of documents that Rexene’s attorneys wish to discuss with Mr.

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158 F.R.D. 43, 32 U.S.P.Q. 2d (BNA) 1839, 1994 U.S. Dist. LEXIS 18045, 1994 WL 556926, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phillips-petroleum-co-v-rexene-products-co-ded-1994.