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Case v. Law: Part 1: A Federal Survey on Protecting Confidential Information

Obtaining a protective order may seem at first a pedantic concern, another litigation t to be crossed or an i to be dotted. But pharmaceutical, medical device, biotech, and other companies spend tens of millions of dollars researching and developing new products, and the release of trade secrets or other confidential commercial information in litigation (particularly when competitors are part of the litigation circus) could lead down a “Palsgraf-ian”1 path of woes so horrible that I will not illustrate. Instead, I will remind you of the power of keeping trade secrets confidential. How many people in the world know the formula for Coke?

The standard practice in any product liability action is to secure a protective order before the production of company documents. The protective order serves to safeguard the disclosure of confidential information.2 Federal Rule of Civil Procedure 26(c) controls the issuance of a protective order in federal proceedings and provides that a “party” or “any person from whom discovery is sought” may obtain a protective order in the court where the action is pending to protect disclosure of “trade secret or other confidential research, development, or commercial information” and for other enumerated grounds.3

With the advent of electronic filing in federal courts, confusion has arisen on how to file secret information. The red-inked stamp of “top secret” is a thing of spy novels, and litigators in some federal districts may not have the luxury of squirreling away confidential documents in an envelope, sealing the envelope with a healthy shot of super glue, and hand-delivering the envelope marked “under seal” to the court clerk.

Advances in electronic filing technology require new ways “to seal and protect.” A good number of federal courts have issued local rules on how to handle this. The following provides the first half of a survey on how federal district courts across the United States handle the filing of confidential information. This article surveys district courts in Alabama through Montana.

Alabama: The United States District Courts for the Northern and Middle Districts of Alabama do not have specific local rules on the filing of documents under seal, although the middle district does require the redaction of personal identifiers under Local Rule 5.2. The United States District Court for the Southern District of Alabama has enacted Local Rule 5.1(d), which requires that a request to deem information confidential be submitted in the form of a motion, not in the form of a letter.

Alaska: The United States District of Alabama has enacted Local Rule 5.4(a)(4), which requires “[a]n order authorizing filing a document under seal in a protective order or in connection with a non-dispositive motion will not be considered or construed as authorization to file the document under seal in connection with a dispositive motion, hearing, or trial, unless: [A] specifically so stated in the order; and [B] the order sets forth the compelling reasons justifying sealing the document.”

Arizona: The United States District Court of Arizona has enacted Local Rule 5.6, entitled “Sealing of Court Records in Unsealed Civil Actions.” Local Rule 5.6 provides that: “No document may be filed under seal in an unsealed case except pursuant to an order by the Court as set forth in subpart (b) of this Rule.” Subpart (b) states that “the Court may order the sealing of any document pursuant to a motion, stipulation, or the Court’s own motion. The Court generally will not enter an order that gives advance authorization to file documents under seal that are designated for such treatment by parties under a protective order or confidentiality agreement. Any motion or stipulation to file a document under seal must set forth a clear statement of the facts and legal authority justifying the filing of the document under seal and must append (as a separate attachment) a proposed order granting the motion […].” Local Rule 5.6 (b) — Emphasis added. “Unless otherwise ordered by the Court, if a party wishes to file a document that has been designated as confidential by another party pursuant to a protective order […], the submitting party must confer with the designating party about the need to file the document (or proposed filing) under seal and whether the parties can agree on a stipulation seeking to have the document (or proposed filing) filed under seal […].” Local Rule 5.6 (d).

Arkansas: The United States District Court of Arkansas does not have a specific local rule on filing confidential documents. Local Rule 26.1, however, requires the disclosure of protective orders as part of the Rule 26(f) report.

California: The United States District Courts for all of the districts in California have enacted specific local rules on protective orders. The recent case of Young v. Axa Art Ins. Corp., slip op., 2010 WL 3895173 (C.D. Cal. Sept. 30, 2010), illustrates the reasons why a district court may reject a stipulated protective order under applicable local rules.

In reviewing the requirements of Fed. R. Civ. P. 26 and the applicable local rules, the court in Young v. Axa Art Ins. Corp., found that the protective order was not narrowly tailored and was overbroad. “It is not sufficient to define the protected material as any Disclosure or Discovery Material that is designated as ‘Confidential’ or ‘Highly Confidential — Attorneys’ Eyes Only’” where the designation “Confidential” applies to information (regardless of how generated, stored, or maintained) or tangible things that contain non-public, confidential, private, proprietary, or commercially or personally sensitive information that requires the protections provided in this stipulation; and the designation “Highly Confidential — Attorneys’ Eyes Only” applies to information or items extremely sensitive “Confidential Information or Items” whose disclosure to another party or non-party would create a substantial risk of serious injury that could not be avoided by less restrictive means. Id.

Second, the court rejected the procedure the parties propose for resolving disputes regarding the designation of confidential information. “Such disputes must strictly comply with the Central District’s Local Rule 37. If a party seeks judicial intervention regarding any discovery challenge, both parties must timely file a written joint stipulation containing all issues in dispute. C.D. Cal. R. 37-2, 37-2.1. The form and preparation of this stipulation are expressly laid out in Local Rules 37-2.1 and 37-2.2. […] The Court will not consider the dispute unless the stipulation or a declaration from the moving party describing how the opposing party failed to cooperate in formulating the stipulation is timely filed.” See C.D. Cal.. 37-2.4.

Third, the court rejected the procedure the parties proposed for filing protected materials. “The parties propose that material filed in this action be designated by counsel as, ‘filed under seal pursuant to a protective order […] and issued by the United States District Court of the Central District of California […].’ However, this designation might suggest that the Court has made a determination about whether particular material fits within the categories described by a Protective entered in this case. If the parties wish to designate material as confidential, they may mark documents ‘confidential’ but should not indicate that the Court has also reached a decision about the nature of the documents.” The court reiterated that “the parties must comply with the Central District’s Local Rule 79 when filing all protected material. No document will be filed under seal without prior approval of the Court. C.D. Cal. R. 79-5.1. To obtain approval, the moving party must submit a written application and proposed order to the presiding judge along with the document submitted for filing.” Id.

Finally, the court found that protective order did not establish the “requisite good cause” and required that “any revised stipulated protective order submitted to the Court, the parties must include a statement demonstrating good cause for entry of a protective order pertaining to the documents or information described in the order. The documents to be protected shall be specifically described and identified. The paragraph containing the statement of good cause should be preceded by the phrase: ‘GOOD CAUSE STATEMENT.’ The parties shall articulate, for each document or category of documents they seek to protect, the specific prejudice or harm that will result if no protective order is entered.”

Colorado: The United State District Court of Colorado recognizes a “‘constitutional obligation’ to determine whether sealing a paper filed in a case […] is warranted.” D.C. Col. L. Civ. R. 7.2A. Consistent with this obligation, “[a] stipulated protective order or a confidentiality agreement executed by the parties, standing alone, will not suffice for sealing a paper or closing a court proceeding to the public, will not substitute for the showing required by D.C. Colo. L. Civ. R 7.2C, and will not be binding on the court.” Id. at 7.2B. “Any document that a party asserts should not be part of the public record pursuant to a protective order or a confidentiality agreement shall be filed as a sealed document. The document shall be sealed for 14 days. If no motion to seal is filed within 14 days, the document shall be automatically unsealed.” Id. “Any motion to seal shall address the nature of the material, the private interest that outweighs the right of public access, the clearly defined and serious injury that would result if relief not granted, and why a less restrictive alternative is not practicable.” Id. at 7.2C. The filing of a motion for protective order stays discovery. Id. at 30.2A.

Connecticut: The United State District Court of Connecticut provides procedures for the filing of sealed proceedings and documents. Under Local Rule 5(e)(3), “[n]o judicial document shall be filed under seal, except upon entry of an order of the Court either acting sua sponte or specifically granting a request to seal that document. Any such order sealing a judicial document shall include particularized findings demonstrating that sealing is supported by clear and compelling reasons and is narrowly tailored to serve those reasons. A statute mandating or permitting the non-disclosure of a class of documents (e.g., personnel files, health care records or records of administrative proceedings) provides sufficient authority to support an order sealing such documents. […] No document shall be sealed merely by stipulation of the parties. A confidentiality order or protective order entered by the Court to govern discovery shall not quality as an order to seal documents for purposes of this rule. Any document filed under seal in the absence of a Court order to seal is subject to unsealing without prior notice to the parties […].” The motion to file confidential documents shall be called a “Motion to Seal” and include a description of the documents. Id. at 5(e)(5). Further, the party filing a document that could be publicly available shall redact personal identifiers. Id. at 5(e)(8).

Delaware: In the United States District Court of Delaware, “[d]ocuments placed under seal must be filed in accordance with CM/ECF Procedures, unless otherwise ordered by the Court.” Local Rule 5.1.3.

District of Columbia: Local Rule LcvR5.1(j) governs the sealing of documents in the United States District Court of Columbia. This rule provides in pertinent part that:

(1) Absent statutory authority, no cases or documents may be sealed without an order from the Court. Any pleading filed with the intention of being sealed shall be accompanied by a motion to seal. The document will be treated as sealed, pending the outcome of the ruling on the motion. Failure to file a motion to seal will result in the pleading being placed in the public record.

(2) Unless otherwise ordered or otherwise specifically provided in these Local Rules, all documents submitted for a confidential in camera inspection by the Court, which are the subject of a Protective Order, which are subject to an existing order that they be sealed, or which are the subject of a motion for such orders, shall be submitted to the Clerk securely sealed in an envelope/box needed to accommodate the documents. The envelope/box containing such documents shall contain a conspicuous notation that carries “DOCUMENT UNDER SEAL” or “DOCUMENTS SUBJECT TO PROTECTIVE ORDER,” or the equivalent.

(3) The face of the envelope/box shall also contain the case number, the title of the Court, a descriptive title of the document and the case caption unless such information is to be, or has been included among the information ordered sealed. The face of the envelope/box shall also contain the date of any order, or the reference to any statute permitting the item sealed […].

Florida: The United States District Courts for the Northern, Middle, and Southern Districts of Florida have enacted their own local rules. While the Northern District does not have a specific rule on motions to seal, the Middle and Southern districts do. For example, Local Rule 1.09 of the United States District Court for the Middle District of Florida provides that “[u]nless filing under seal is authorized by statute, rule, or order, a party seeking to file under seal any paper or other matter in any civil case shall file and serve a motion, the title of which includes the words ‘Motion to Seal’ and which includes (i) an identification and description of each item proposed for sealing; (ii) the reason that filing each item is necessary; (iii) the reason that sealing each item is necessary; (iv) the reason that a means other than sealing is unavailable or unsatisfactory to preserve the interest advanced by the movant in support of the seal; (v) a statement of the proposed duration of the seal; and (vi) a memorandum of legal authority supporting the seal.” Local Rule 1.09.

Likewise, Local Rule 5.3(a) of the United States District Court for the Southern District of Florida provides that “[u]nless otherwise provided by law, Court rule, or Court order, proceedings in the United States District Court are public, and Court filings are matters of public record. Where not so provided, a party seeking to file matters under seal shall follow the procedures prescribed by this Local Rule. Pursuant to Section 5A of the CM/ECF Administrative Procedures, attorneys are prohibited from filing sealed documents electronically.” Local Rule 5.3(b) sets forth the procedures for filing under seal. The Discovery Practices Handbook for this district warns that “counsel should be aware that the mere filing of a motion for a protective order does not, absent an order of the Court granting the motion, excuse the moving party from complying with the discovery requested or scheduled.” See Discovery Practices Handbook, VI “Motions to Compel or Protective Order.”

Georgia: Neither the United States District Court for the Northern District of Georgia nor the Southern District of Georgia has enacted local rules on filing documents under seal.

Hawaii: The United States District Court of Hawaii has enacted Local Rule 83.12, which governs the sealing of information filed with the court. This court requires more than a stipulation or blanket protective order before a party may designate matters filed under seal.

Idaho: The United States District Court of Idaho has enacted Local Civil Rule 5.3, which sets for the procedure for filing sealed documents. Among other things, the party must file a motion, supporting memorandum, and proposed order.

Illinois: The United States District Court of the Northern District of Illinois has enacted Local Rules 5.8 and 26.2, which set forth procedures for filing materials under seal. The Southern District of Illinois does not have any specific local rules addressing these issues.

Indiana: The United States District Court for the Northern and Southern Districts of Indiana have enacted Local Rule 5.3, which provides procedures for filing documents under seal.

Iowa: The United States District Court for the Northern and Southern Districts of Iowa have enacted Local Rule 5(c) and 5.2, which provides the method for filing sealed documents and prohibits the electronic filing of a proposed order containing personal identifiers.

Kansas: The United States District Court of Kansas implemented Local Rule 5.4.6, which provides the procedures for filing documents under seal. Under Local Rule 26.2, the “filing of a motion for a protective order pursuant to Fed. R. Civ. P. 26(c) or 30(d) stays the discovery at which the motion is directed pending order of the court.”

Kentucky: The United States District Courts for the Eastern and Western Districts of Kentucky do not have local rules on filing documents under seal.

Louisiana: The United States District Court for the Eastern District of Louisiana has enacted Local Rule 5.6, which sets forth procedures for filing documents under seals. Requirements include a motion, non-confidential memorandum, and proposed order. Under Local Rule 5.7.06, the United States District Court for the Western District of Louisiana provides that documents ordered to be placed under seal “may be filed conventionally or electronically.”

Maine: The United States District Court for Maine has enacted Local Rule 7A, which provides the procedures for filing sealed documents and pleading. “To obtain an order allowing one or more documents or pleadings to be sealed, a party shall electronically file on ECF a motion to seal together with the separate document(s) or pleading(s) sought to be sealed. The motion shall propose specific findings as to the need for sealing and the duration the document(s) should be sealed. The motion shall include a statement whether there is agreement of the parties to the sealing. The ECF system will generate and send a Notice of Electronic Filing (NEF) to counsel of record notifying them of the filing, but counsel will be unable to view the document. If service is required, all counsel must be served in a manner other than through ECF.” Local Rule 7A(a).

Rule 7A includes the following exception:

“No motion or order is required for the filing of a redacted document or a document under seal that is already subject to an existing protective order or that is included within a category of pleadings and documents deemed sealed or authorized to be filed ex parte pursuant to a federal statute, the federal rules of procedure, or the local rules of this court. Any filing of a document which had been previously authorized shall reference the prior authority for such filing.” Local Rule 7A(e).

Maryland: The United States District Court of Maryland sets forth procedures for sealing documents in Local Rule 11: “Any motion seeking the sealing of pleadings, motions, exhibits, or other documents to be filed in the Court record shall include (a) proposed reasons supported by specific factual representations to justify the sealing and (b) an explanation why alternatives to sealing would not provide sufficient protection. The Court will not rule upon the motion until at least fourteen (14) days after it is entered on the public docket to permit the filing of objections by interested parties. Materials that are the subject of the motion shall remain temporarily sealed pending a ruling by the Court. If the motion is denied, the party making the filing will be given an opportunity to withdraw the materials. Upon termination of the action, sealed materials will be disposed of in accordance with L.R. 113.” L.R. 11.

Massachusetts: The United States District Court of Massachusetts has enacted Local Rule 7.2, which controls “impounded and confidential materials.” Local Rule 7.2 provides, in pertinent part:

(a) Whenever a party files a motion to impound, the motion shall contain a statement of the earliest date on which the impounding order may be lifted, or a statement, supported by good cause, that the material should be impounded until further order of the court. The motion shall contain suggested custody arrangements for the post-impoundment period.

(b) The clerk shall attach a copy of the order to the envelope or other container holding the impounded material.

(c) If the impoundment order provides a cut-off date but no arrangements for custody, the clerk (without further notice to the court or the parties) shall place the material in the public information file upon expiration of the impoundment period. If the order provides for post-impoundment custody by counsel or the parties, the materials must be retrieved immediately upon expiration of the order, or the clerk (without further notice to the court or the parties) shall place the material in the public file.

(d) Motions for impoundment must be filed and ruled upon prior to submission of the actual material sought to be impounded, unless the court orders otherwise.

(e) The court will not enter blanket orders that counsel for a party may at any time file material with the clerk, marked confidential, with instructions that the clerk withhold the material from public inspection. A motion for impoundment must be presented each time a document or group of documents is to be filed.

Michigan: The United States District Courts for the Eastern and Western Districts of Michigan have enacted local rules on civil material filed under seal. In the Eastern District, Local Rules 5.3 and 26.4 control. In the Western District, Local Rule 10.6 sets forth the procedures for filing documents under seal.

Minnesota: The United States District Court for Minnesota has enacted Local Rule 79.1, which sets out the procedures for the custody and disposition of records, exhibits, and documents under seal. The court has also provided forms for such orders.

Mississippi: The United States District Court for the Northern and Southern Districts of Mississippi have enacted Local Rule 5.2, which identifies the requirements and responsibilities of counsel and parties to protect personal and sensitive information. Local Rule 79 sets forth the procedures for filing documents under seal.

Missouri: The United States District Court for the Eastern District of Missouri has enacted Local Rule 83-12.05 on pleadings and documents filed under seal. In Local Rule 26.1, the United States District Court for the Western District of Missouri requires parties to identify protective orders as part of the discovery plan, but no specific procedures are provided for the filing of confidential documents.

Montana: The United States District Court of Montana has enacted Local 1.8, which provides procedures for the filing and service of sealed documents. The second part of this survey will be in the next edition o


[i] Palsgraf v. Long Island R. Co., 162 N.E. 99 (N.Y. 1928).

[ii] Fed. R. Civ. P. 26 (e).

[iii] Id.

Finis

Citations

  1. Palsgraf v. Long Island R. Co., 162 N.E. 99 (N.Y. 1928). Jump back to footnote 1 in the text
  2. Fed. R. Civ. P. 26 (e). Jump back to footnote 2 in the text
  3. Id. Jump back to footnote 3 in the text