Defense requests to enter into protective or confidentiality orders are becoming more and more routine. Whether in a trucking accident, products liability, negligent hiring, or respondeat superior case, corporate defendants often attempt to shield voluminous internal documents and financial information with broad protective orders. Whether it is a trucking company attempting to shield its training manuals or a tire manufacturer attempting to shield its substandard manufacturing processes, corporate defendants increasingly request protective orders before disclosing any documents relevant to their practices, procedures, or policies. Before agreeing to a Defendant's proposed protective order, consider both the necessity for a protective order in the first place, as well as the specific provisions that will be included.
Protective orders governing discovery in South Carolina courts generally come from one of two sources: Rule 26(c) of the South Carolina Rules of Civil Procedure (and its Federal equivalent) and the Trade Secrets Act. Rule 26(c)(7) specifically refers to trade secrets, or "other confidential research, development, or commercial information not to be disclosed or be disclosed only in a designated way." The Trade Secrets Act states that "a court shall preserve the secrecy of an alleged trade secret by reasonable means, which may include granting protective orders in connection with discovery proceedings."
"In determining whether trade secret information is subject to a protective order under Rule 26(c)(7), federal and state courts typically apply a balancing test that incorporates a ‘relevant and necessary' standard for the party seeking to discover the trade secret information." The Trade Secrets Act's requirements do not supplant, but instead complement Rule 26(c)(7). Although this article will not discuss the merits of a defense request for a protective order, it is suggested that all plaintiffs scrutinize a defense request for a protective order to determine if such a request is in fact valid.
The following are considerations that come up again and again when defendants propose protective orders, and with which a well informed plaintiff should be familiar. This is by no means a complete and exhaustive list of issues, but instead is intended to give plaintiffs a general familiarity with typical defense proposed provisions and to suggest potential negotiating points.
I. Sharing Provisions.
The typical defense proposed protective order generally attempts to restrict disclosure of confidential materials to plaintiff's counsel, counsel's staff, and retained experts. Retained experts are often requested to sign and return a copy of the protective order. Restrictive protective order provisions such as this prevent plaintiff's attorneys from discussing confidential materials with other attorneys who are litigating similar cases involving the same defendants, defects, or accidents. Non-sharing protective orders also may allow a defendant to learn the identity of a plaintiff's consulting expert if such an expert must sign and return to the defendant a copy of the protective order.
Defendants who are sued multiple times over the same or similar defective product, procedure, or accident routinely seek to prevent plaintiffs from sharing and comparing information. This tactic often is used by vehicle and tire manufacturers, who oftentimes face constant lawsuits over similarly defective products. A protective order that restricts plaintiffs from sharing and comparing confidential documents means that only the defendant will know which documents have been produced in each particular case and allows defendants to effectively hide key damaging documents from other plaintiffs litigating similar claims.
To combat this tactic, plaintiffs may want to request that the protective order permit the sharing of confidential documents with other lawyers prosecuting similar cases. The definition of "similar" will be a key negotiating point. Defendants likely will want to restrict your ability to share information by narrowly defining similar cases; while plaintiffs should seek to have as broad a sharing provision as possible.
II. Return of Documents at the Close of Litigation.
Defendants often seek to require a return of all confidential documents at the close of litigation, and routinely seek to have returned any and all copies plaintiff's counsel has made of such documents. Agreeing to this request means that the same plaintiff's attorney will have to start from scratch if ever involved in other litigation with that particular defendant, and prevents sharing key defendant documents with other plaintiff's prosecuting similar cases. In addition, it may strengthen a defendant's later request to seal a trial record if the plaintiff has already agreed that all documents must be returned to the defendant at the close of litigation.
If a defendant will negotiate this term favorably at the time you are negotiating the overall protective order, so much the better. Often, however, the only course of action for plaintiffs is simply to convince the defendant to negotiate this provision at a later date, with the protective order either not mentioning a return of documents or simply noting that the parties cannot agree over that provision and that they will negotiate at a later date.
Allowing for the possibility of retaining documents after the close of litigation increases the chances that a plaintiff will be able to share the documents with other attorneys, increases the likelihood that a plaintiff will be able to retain them after the close of litigation, and at the very least gives a plaintiff one more negotiating tactic when attempting to settle the case.
III. Methods and Time Limits for Challenging Confidential Designations.
The method, time, and burden for challenging a defendant's designation of certain material as confidential is an often overlooked, but critical component of any protective order. This is especially true if the protective order will govern any documents produced throughout the course of discovery that the defendants contend are confidential. If the protective order only governs the production of specifically enumerated documents that are agreed to contain confidential information or trade secrets, then challenges to confidentiality may not be of major significance.
If it is an ongoing protective order that may apply to documents produced throughout the course of litigation, however, defendants often label anything they produce as confidential.
Defendants often will attempt to limit the time in which a plaintiff may challenge a confidential designation. They will require that plaintiffs initiate a challenge with the court over confidential designations and place the burden of proving that documents are not confidential on the plaintiff making the challenge.
A better approach for plaintiffs is to attempt to place no time limitation on challenges to confidential designations, require the defendant to file a motion to determine the propriety of any challenges raised by a plaintiff within a certain time frame after being informed of such a challenge, and to place the burden on the defendant to prove that the confidential designation is correct.
VII. Certification of Confidential Designation.
When producing documents under a protective order that governs discovery in a case, defendants and defense attorneys often designate documents as confidential without conducting an investigation into whether the documents are in fact confidential. Without restrictions or certifications as to confidential designations, defendants may designate documents as confidential simply because there is no recourse to doing so.
One way for the plaintiff to combat this is to require that the defendant or defendant's counsel certify that they have conducted a good faith investigation into the documents produced, believe that the documents are in fact confidential, have not been produced in any other litigation without a confidential designation, have never been entered as exhibits in open court, or have never been produced to government regulators or other outside groups.
VIII. Authenticity of Documents.
Protective orders give plaintiffs an opportunity to clear up potential authenticity questions regarding documents produced. It may be beneficial, and prevent a later need for Requests for Admissions or depositions of corporate witnesses to include language in a protective order that documents produced pursuant to the protective order are true and accurate copies of documents from the defendant's records or created by a defendant.
Without any restrictions on the manner or method for actually designating a particular document as confidential, defendants often place a "CONFIDENTIAL" stamp across the entire face of a document or otherwise interfere with its legibility. Plaintiffs should require that any confidential designation be placed in such a manner that it does not interfere with the document's legibility. In addition to making documents more legible, this may also make it easier to digitize and search voluminous documents.
X. Designating Depositions as Confidential
Defense requested protective orders may apply to portions of depositions taken throughout the course of discovery, in addition to documents produced by a defendant. Without limiting language in an applicable protective order, defendants often attempt to designate an entire deposition transcript as confidential even if only 1% of the deposition content contains confidential information. This type of designation may prevent or at least make it more burdensome for a plaintiff to utilize particularly damaging defense testimony when defending a summary judgment motion or seeking to compel production of additional documents. A better method for designating depositions as confidential is to require that only specific lines of each deposition will be designated as confidential.
Confidentiality orders are a fact of life in today's litigation, but by being aware of the typical onerous defense proposals, plaintiffs may combat their overuse and abuse. If a defendant insists on the continued use of its proposed provisions, do not be afraid to ask a Court to rule on the issue.