Patriot Rail Corp. v. Sierra Railroad Company

Filing 218

ORDER denying 197 Motion to Enforce Amended Protective Order signed by Judge Morrison C. England, Jr on 3/13/12. (Matson, R)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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PATRIOT RAIL CORP., a
Delaware corporation,,

No. 2:09-cv-00009-MCE-EFB

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Plaintiff,
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ORDER

v.
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SIERRA RAILROAD COMPANY,
a California corporation,

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Defendant.

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______________________________

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And Related Counterclaim.
______________________________

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----oo0oo----

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Defendant and Counterclaimant Sierra Railroad Company

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(“Sierra”) requests, through the motion presently before the

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Court, an order enforcing the terms of Amended Protective Order,

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filed on January 24, 2012, and now in place with respect to the

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above-captioned matter.

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Due to ongoing acquisition negotiations between Sierra and a

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prospective purchaser, Iowa Pacific Holdings (“IPH”), and due

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diligence disclosures requested by IPH as to pending litigation,

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including the present case, Sierra filed a motion to permit

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amendment of the initial May 21, 2009 Protective Order to permit

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such disclosure.

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January 24, 2012 (ECF No. 189) and, as indicated above, an

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Amended Protective Order (ECF No. 190) was issued that same day.

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Under the terms of the Amended Protective Order, Sierra was

That Motion was granted by order dated

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permitted to disclose its litigation files to a prospective

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purchaser like IPH, in order to satisfy due diligence requests,

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so long as 1) said prospective purchase executes a stipulation to

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be bound by the terms of the Amended Protective Order; 2) a “list

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of documents” proposed to be disclosed is provided to Defendant

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Patriot Rail Corporation (“Patriot”); and 3) Patriot is given the

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opportunity to designate a “certain narrow category of documents”

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as “highly confidential.” and subject to only restricted

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disclosure.

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designation, Patriot was warned to avoid resort to “mass,

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indiscriminate, or routinized” categorization.

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2:25-26.

In discussing use of the “highly confidential”

ECF No. 190,

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Sierra now asks the Court to enforce the terms of the

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Amended Protective Order on grounds that Patriot has sought to

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designate virtually “the entire contents of Sierra’s litigation

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file, even documents produced by third parties or by Sierra

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itself, as ‘highly confidential.’”

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to Sierra, that amounts to just the kind of mass designation that

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the Amended Protective Order prohibited.
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Motion, 3: 21-22.

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Sierra also argues that Patriot makes the same kind of due

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diligence requests of its own potential acquisition targets,

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including the aborted purchase negotiations that underlie the

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present litigation.

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Patriot counters that Sierra has failed to satisfy the

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second prerequisite for disclosure,1 which requires that Sierra

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provide a “list of documents” to be provided so that Patriot, in

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turn, can designate within five days which of those documents

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should be classified as “highly confidential”.

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By its own admission, Sierra has simply “described the

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contents of its litigation file in categorical fashion.”

Motion,

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2:8.

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general categories of documents it sought to disclose.

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of Louis A. Gonzalez, Ex. B.

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dated February 1, 2001 (see id.), stating that the terms of the

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Amended Protective Order “clearly directs Sierra to Provide a

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concise list of documents- not categories.”

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original.

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fashion, the documents it sought to protect as “highly

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confidential” in the face of the general categories of documents

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identified by Sierra.

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It accordingly provided counsel for Patriot with only eight
See Decl.

Patriot’s counsel objected by email

Id., emphasis in

Patriot went on to designate, in extremely broad

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Although there appears to have been an argument advanced
by Patriot to the effect that IPH must demonstrate that it
remains engaged in acquisition discussions, that contention is
misguided. IPH’s General Counsel, Daniel Marko, previously
submitted a declaration to that effect (ECF No. 171), and it
appears uncontroverted that IPH has executed a stipulation to be
bound by the Amended Protective Order, as that order requires.

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The Court agrees that the specific terms of the Amended

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Protective Order provide that a “list of documents be provided”

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before Patriot is obligated to designate any documents so listed

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as “highly confidential”.

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by Sierra do not suffice in that regard.

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sympathetic to Sierra’s claim that it has to make its litigation

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files available to IPH to satisfy IPH’s due diligence request,

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and cannot predict just what documents IPH chooses to examine,

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that does not obviate the terms of the Amended Protective Order

The eight broad categories identified
While the Court is

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which unequivocally require that a “list of documents” be

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furnished to Patriot beforehand.

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Although the Court recognizes that a document by document

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listing may be onerous and even largely unnecessary to the extent

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various groups of documents have been generated by Patriot, it is

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equally clear that more particularity has to be provided by

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Sierra in order to meet the requirements of the Amended

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Protective Order.

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a mutually acceptable means of identification, short of a serial

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description of each and every piece of paper in Sierra’s

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litigation file, that will satisfy their concerns.

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meantime, however, the categorical description offered by Sierra

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is not adequate and cannot support the present motion.

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The parties are encouraged to work together on

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In the

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Defendant Sierra’s Motion to Enforce Amended Protective Order

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(ECF No. 197) is accordingly DENIED, without prejudice, at this

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time.2

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IT IS SO ORDERED.
Dated: March 13, 2012

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_____________________________
MORRISON C. ENGLAND, JR.
UNITED STATES DISTRICT JUDGE

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Because oral argument was not of material assistance, the
Court ordered this matter submitted on the briefs. E.D. Cal.
Local Rule 78-230(h).
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