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SCOPE AND ENFORCEMENT OF
PROTECTIVE ORDERS*
by
James L. Haigh and Sarah L. Showalter
Attorneys at Law
Cousineau McGuire Chartered
Minneapolis, Minnesota
Protective Orders
- When to seek a protective order
- Obtaining a protective order
- Enforcing a protective order
When to Seek a Protective Order
A protective order may be sought in a variety of circumstances. A party seeking a protective order has the burden to show "good cause" why justice requires the order to protect a party or person from "annoyance, embarrassment, oppression, or undue burden or expense." Minn. R. Civ. P., Rule 26.03.
When issuing a protective order the court may order any of the following:
- that the discovery not be had;
- that the discovery may be had only on specified terms and conditions, including a designation of the time or place;
- that the discovery may be had only by a method of discovery other than that selected by the party seeking discovery;
- that certain matters not be inquired into, or that the scope of the discovery be limited to certain matters;
- that discovery be conducted with no one present except persons designated by the court;
- that a deposition, after being sealed, be opened only by order of the court;
- that a trade secret or other confidential research, development, or commercial information not be disclosed or be disclosed only in a designated way; or
- that the parties simultaneously file specified documents or information enclosed in sealed envelopes to be opened as directed by the court.
Corporate clients often have a strong interest in maintaining confidentiality of matters related to business plans, operations, and methods falling within the scope of Rule 26.03(g). Federal Rule of Civil Procedure 26(c) also provides the same protection to parties and non-parties. A protective order may also be sought on the basis to that the discover sought would place an undue burden or expense on the party.
Protective orders, however, only control the use of material or information produced during discovery. Without a protective order, documents and sensitive information can be used in any way and for any purpose permitted under the law.
A protective order is a limiting order. It is intended to restrict, limit, or prohibit discovery and should be obtained early on and before the proverbial "cat is out of the bag." Even with a protective order in place, enforcement can be challenging.
A protective order may also be sought to protect high-level corporate executives from unwarranted and harassing discovery. Salter v. Upjohn Co., 593 F.2d 649 (5th Cir. 1979) is often cited for upholding a protective order requiring a plaintiff to make an appropriate showing prior to deposing an upper-level executive. See also, Thomas v. International Business Machines, 48 F.3d 478, 482 (10th Cir. 1995); Baine v. General Motors Corp., 141 F.R.D. 332 (M.D. Ala. 1991). A plaintiff must generally demonstrate that the information is relevant and can not be obtained through other less intrusive means, such as designating an individual under F. R. Civ. P. 30(b)(6).
Obtaining a Protective Order
The preferred method of obtaining the protective order is through stipulation of the parties so as to avoid a contested motion.
Parties may be persuaded to stipulate to a protective order for various reasons, including the following:
- expediting access to the information or documents;
- avoiding time and expense of contested motion;
- compromise between parties regarding scope of discovery sought (i.e., a partial production may avoid uncertainty of having the court decide the scope of contested discovery);
- controlling the timing of discovery (i.e., agreeing discovery will be produced after hearing of early motion to dismiss);
- an effort to move toward mediation/settlement negotiations, (i.e., documents or information will be produced and protective order remains in effect through mediation, if settlement is not reached, party can seek to lift protective order); and
- case may have higher value if party seeking protective order has assurance of confidentiality surrounding discovery.
Provisions of protective order may include:
- limiting dissemination and disclosure;
- requiring return of documents at conclusion of case;
- defining confidential documents;
- establishing protection is for a continuing duration;
- notice of intent to contest or seek modification or relief from order;
- requiring bond of discovering party and designation of a custodian of the protected documents;
- award of fees if party must seek enforcement of order.
Without the protective order stating that it is of a continuing duration, it likely is unenforceable after dismissal of the case. A court has continuing jurisdiction to clarify and, if necessary, modify any protective order still in effect, even if the underlying suit has been dismissed. See United Nuclear Corp. v. Cranford Ins. Co., 905 F.2d 1424 (10th Cir. 1990). If the protective order is obtained in federal court and does not state that it is of a continuing duration, the court likely does not retain jurisdiction as to enforcement of the order unless its terms are incorporated into the order of dismissal at the conclusion of the case. See cf., Kokkonen v. Guardian Life Ins. Co. of America, 114 S.Ct. 1673, 511 U.S. 375 (1994).
However, courts may be dubious of undertaking to retain jurisdiction over continuing discovery issues after the disposition of a case. Consider including language that challenges to or modification of the protective order must be made within a designated period of time. See, e.g., Jochims v. Isuzu Motors, Ltd., 151 F.R.D. 338, 343 (S.D. Iowa 1993).
If the parties do not stipulate to a protective order, the party seeking protection has the burden to show "good cause" why justice requires the order to protect a party or person from "annoyance, embarrassment, oppression, or undue burden or expense." The party requesting a protective order must show that the information sought to be protected is within the scope of the rule and that it might be harmed by its disclosure. See Iowa Beef Processors, Inc. v. Bagley, 601 F.2d 040 (8th Cir. 1979).
Normally, the trial court has a wide discretion in determining whether the discovery rules are being used by a litigant in bad faith to unreasonably annoy, embarrass, oppress or injure a party or the witness, and also has a wide discretion in protecting the parties and witnesses from such abuses.Narveson v. White, 355 N.W.2d 474, 476 (Minn. App. 1984), citing Thermorama, Inc. v. Shiller, 135 N.W.2d 43, 46 (1965). The court should exercise its power under the rule "with liberality" toward the purpose of protecting parties and witness. Id.
When protection is sought for a client's "trade secret or other confidential research, development, or commercial information," the court must be persuaded that the alleged confidential documents require the protection of a protective order.
Confidential information has been defined as:
Information that constitutes a trade secret that is of value to the employer and important in the conduct of his business, that by reason of discovery or ownership the employer had the right to use enjoyment of the secret and that the secret was communicated while employed in a position of trust and confidence to make it inequitable and unjust for him to disclose it to others.SI Handling Systems, Inc. v. Heisley, 753 F.2d 1244 (3rd Cir. 1985).
Any information that gives one's business an edge over competitors is confidential information. Id. This includes a list of customers. Id.
Trade secrets have been defined in the Restatement (Third) of Unfair Competition § 39 (1993), as:
A trade secret is any information that can be used in the operation of a business or other enterprise and that is sufficiently valuable and secret to afford an actual or potential economic advantage over others.A trade secret is something that it is not a matter of public knowledge. Some factors to be considered in determining whether information is a trade secret are:
- The extent to which the information is known outside of the owner's business;
- The value of the information to the owner and to his competitors;
- The amount of effort or money expended by the owner in developing the information; and
- The ease or difficulty with which the information could be properly acquired by others.
Enforcing a Protective Order
A party or non-party may seek relief from or modification to a previously issued protective order. Collateral litigants may seek discovery produced under a protective order in the interest of saving time and effort and avoiding duplicative discovery. A Minnesota District Court has rejected this argument. See Kramer v. Boeing Company, 134 F.R.D. 256 (D. Minn. 1991).
Modification of a protective order is left to the discretion of the court, however, the federal circuits vary as to the standard applied in amending or lifting a protective order. Circuits that require a higher showing include the Second Circuit which has held that protective orders are modifiable only under extraordinary circumstances. See In re "Agent Orange", 821 F.2d 139, 147-48 (2nd Cir. 1987). However, the Ninth Circuit favors avoiding duplicative discovery and more readily allows for modification of a protective order. See Wilk v. American Medical Association, 635 F.2d 1295 (7th Cir. 1980).
The Eighth Circuit requires a showing that "intervening circumstances have obviated or eliminated any potential prejudice to the protected party." Jochims v. Isuzu Motors, Ltd., 151 F.R.D. 338 (S.D. Iowa 1993), citing Iowa Beef Processors, Inc., 601 F.2d 949, 954 (8th Cir. 1979).
If a party or counsel violates a protective order that remains in effect remedies are available either through the court issuing the order or another court by special hearing.
An example of court enforcement of a protective order is seen in Kramer v. Boeing Company, 134 F.R.D. 256 (D. Minn. 1991) where defense counsel's motion to enforce a settlement agreement and hold the Plaintiffs' counsel in criminal and civil contempt for refusal to return defendants' discovery documents as required under the protective orders and settlement agreement was granted based upon counsel's failure to return documents produced under a protective order.
In Kramer, documents were produced under two protective orders which provided for the return or destruction of the materials upon a final determination of the lawsuit. Further, the settlement agreement in the case incorporated by reference a letter between counsel for defendant's and plaintiff's counsel wherein it was agreed plaintiff's counsel would return all documents produced by defendants under the protective order by a certain date.
At the time of the settlement agreement was entered plaintiff's counsel commenced another action on behalf of other individuals injured in the same aircraft fire. Plaintiff's counsel refused to return the documents produced in the earlier litigation on the basis that he wanted to use the documents as evidence in the second lawsuit and that he was confident that the same documents would be produced by the defendants in the second lawsuit. The court was not persuaded by plaintiff's counsel's explanation for his disregard for the protective orders and settlement agreement and found plaintiff's counsel to be in contempt.
The court further found that plaintiff's counsel's dilatory conduct constituted a failure to use reasonable diligence to comply with the protective orders and sanctioned counsel with the costs and attorney's fees defendants incurred as a result of him unreasonably and vexatiously multiplying the proceedings as authorized under 28 U.S.C. § 1927.
Conclusion
Beyond recognizing when a protective order is necessary to serve a client's interest, counsel must anticipate challenges to modify or vacate a protective order. One should also be aware that, depending upon the nature of later violations of the protective order, the only remedy available may be civil or criminal contempt. To assist in enforcing a protective order when a case is settled at mediation, the protective order should be incorporated into the mediated settlement agreement, and then incorporated into any final formal settlement agreement. The terms of the settlement agreement, including the protective order, should then specifically be incorporated into the court's order for dismissal.
Born Kankakee, Illinois; admitted to bar, 1978, Minnesota, U.S. District Court, District of Minnesota and the Eighth Circuit. Education: B.A., University of Illinois, 1970; M.A., University of Southern California, 1973; J.D., William Mitchell College of Law, 1978; Lecturer, Minnesota Institute of Legal Education:"Coverage B in CGL Policies," 1987 and 1992;"Primary, Excess and Other Insurance," 1991 and 1993; "Legal Ethics for the Insurance Defense Attorney,"1994;" Introducing the 1996 ISO CGL Policy," 1996; "Insurance Coverage Institute," 1997; Lecturer, 2003, Clarion Legal's "Insurance Law Institute 2003," Historical Analysis of the Changes to Coverage B; Lecturer, 2004, Minnesota Defense Lawyer Association's 29th Annual Trial Technique Seminar, "Scope & Enforcement of Protective Orders." Qualified Neutral Mediator and Arbitrator under Rule 114 of the Minnesota General Rules of Practice. Member: Hennepin County Bar Association; Minnesota State Bar Association; American Bar Association; Defense Research Institute; Minnesota Defense Lawyers Association. AV-rated by Martindale-Hubbell. Named as "Superlawyer" by The Journal of Minnesota Law & Politics
direct dial number: (952) 525-6943
e-mail: jlh@cousineaulaw.com