Health Grades, Inc. v. MDX Medical, Inc.

Filing 484

ORDER. MDx Medical, Inc.'s 310 Motion for a Determination That Nine MDx Licensing Agreements Are Subject to the Terms of the Protective Order in This Case as Properly Designated as Highly Confidential--Attorneys' Eyes Only is granted. M Dx Medical, Inc.'s 383 Motion for Leave to Restrict Access to Document Nos. 340-1, 340-2, 340-3, 340-4, 340-5, 340-6, 340-7, 340-8, and 340-9 is granted. Health Grades' 429 Motion for Determination That Materials Are Properly Designated Pursuant to the Terms of the Protective Order is denied. By Magistrate Judge Boyd N. Boland on 1/15/13.(mnfsl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Magistrate Judge Boyd N. Boland
Civil Action No. 11-cv-00520-PAB-BNB
HEALTH GRADES, INC.,
Plaintiff,
v.
MDX MEDICAL, INC., d/b/a Vitals.com,
Defendant.
______________________________________________________________________________
ORDER
______________________________________________________________________________
This matter arises on the following:
(1)

MDx Medical, Inc.’s Motion for a Determination That Nine MDx Licensing

Agreements Are Subject to the Terms of the Protective Order in This Case as Properly
Designated as Highly Confidential--Attorneys’ Eyes Only [Doc. # 310] (“MDx’s Motion for
Protection”);
(2)

MDx Medical, Inc.’s Motion for Leave to Restrict Access to Document Nos.

340-1, 340-2, 340-3, 340-4, 340-5, 340-6, 340-7, 340-8, and 340-9 [Doc. # 383] (“MDx’s
Motion to Restrict Access”); and
(3)

Health Grades’ Motion for Determination That Materials Are Properly

Designated Pursuant to the Terms of the Protective Order [Doc. # 429] (“HG’s Motion for
Protection”).

I. MDx’s Motion for Protection [Doc. # 310]
This is a patent infringement case between competitors. To facilitate discovery, I entered
a blanket protective order. Protective Order [Doc. # 227]. The Protective Order allows a party
to designate relevant materials sought through discovery either as Confidential or as Highly
Confidential. With respect to Highly Confidential information, the Protective Order provides:
Any Document or testimony of a Producing Party which contains
particularly sensitive Confidential Information may be designated
as HIGHLY CONFIDENTIAL. Material designated as HIGHLY
CONFIDENTIAL pursuant to this Protective Order shall only be
made available to the persons described in §5.2, and such
treatment shall apply to any so designated Document, testimony, or
other discovery material, all copies thereof, and all derived
abstracts, summaries, or notes thereof to the extent they refer to the
Confidential Information contained therein.
Protective Order [Doc. # 227] at ¶4.2. Highly Confidential material may be disclosed only to
outside counsel and their staffs; “authors, creators, addressees, and all recipients of the Protected
Material, who prior to the Action, lawfully received or had access to the Protected Material”;
expert witnesses, consultants, and their staffs; third parties assisting in the action after signing an
affidavit to comply with the terms of the Protective Order; court reporters; court personnel; and
“no more than six (6) officers, directors, employees or former employees (including House
Counsel) of a Party . . . whose cooperation or assistance is reasonably necessary to enable the
Party’s Outside Counsel to prepare for trial in this Action.” Id. at ¶¶5.1-5.2.
Pursuant to the Protective Order, MDx designated nine license agreements as Highly
Confidential. The documents are highly confidential, according to MDx, because they
“represent, in their entirety, information concerning MDx’s current and ongoing relationships
with their business partners,” MDx’s Motion for Protection [Doc. # 310] at p. 4, and include

2

“specific terms of its agreements with its business partners, such as the price and end date of
such agreements,” disclosure of which “would unfairly provide . . . competitors with a
significant advantage against MDx in competing for such future business. . . .” Declaration of
Erika Boyer [Doc. # 310-3] at ¶10.
Health Grades (“HG”) opposes MDx’s Motion for Protection arguing that only portions
of the license agreements contain confidential and the MDx should be required to be more
specific in its designation. HG relies on §4.3 of the Protective Order [Doc. # 227], which
provides:
The Producing Party agrees to designate information as
CONFIDENTIAL or HIGHLY CONFIDENTIAL on a good faith
basis and not for purposes of harassing the Receiving Party or for
purposes of unnecessarily restricting the Receiving Party’s or the
public’s access to information concerning the lawsuit. A
Producing Party must take care to designate for protection only
those parts of the Documents or testimony that qualify--so that
other portions of such Documents or testimony for which
protection is not warranted are not swept unjustifiably within the
ambit of this Protective Order.
Blanket protective orders, like the one entered in this case,” are designed to “serve the
interests of a just, speedy, and less expensive determination of complex disputes by alleviating
the need for and delay occasioned by extensive and repeated judicial intervention. In view of the
increasingly complex cases and the existing workload of the trial courts, blanket protective
orders are essential to the functioning of civil discovery. Absent such orders, discovery would
come to a virtual standstill.” Gillard v. Boulder Valley School Dist. RE-2, 196 F.R.D. 382, 386
(D. Colo. 2000)(internal quotation and citation omitted). The procedure urged by HG would
have just the opposite effect--courts would become mired in controversies about whether
particular sentences, or specific facts contained within particular sentences, actually are
3

confidential. That is not the purpose of the procedure established by blanket protective orders.
Nor does HG indicate how the designation of the license agreements as confidential is harassing
or even prejudicial to it.
MDx’s Motion for Protection [Doc. # 310] is GRANTED.
II. MDx’s Motion to Restrict Access [Doc. # 383]
HG attached copies of the nine disputed license agreements to its Response [Doc. # 340].
Because the license agreements contain confidential business information and were properly
designated as Highly Confidential under the Protective Order, an appropriate showing has been
made under D.C.COLO.LCivR 7.2 to restrict access to them.
MDx’s Motion to Restrict Access [Doc. # 383] is GRANTED, and access to Doc. ##
340-1, 340-2, 340-3, 340-4, 340-5, 340-6, 340-7, 340-8, and 340-9 shall be RESTRICTED,
LEVEL 1.
III. HG’s Motion for Protection [Doc. # 429]
MDx challenges HG’s purported designation of deposition transcripts as Highly
Confidential under the Protective Order [Doc. # 227]. Section 6.1.8 of the Protective Order
[Doc. # 227] provides:
Deposition Testimony: Designation of portions, or the entirety, of
deposition transcripts (including exhibits) as “CONFIDENTIAL”
or “HIGHLY CONFIDENTIAL” shall be made by a statement to
such effect on the record in the course of the deposition, or upon
review of such transcript by Counsel for the deponent within
fourteen (14) business days after Counsel’s receipt of the
transcript. Until the expiration of the fourteen (14) business day
time period, deposition transcripts will be treated by the Parties as
HIGHLY CONFIDENTIAL,” in their entirety. . . .
Designations made within fourteen (14) business days after receipt
of a transcript of a deposition shall be made by sending written
4

notice to the Court Reporter, to Counsel for all Parties to this
Action, and to any other person known to have a copy of said
transcript. The notice shall reference this Protective Order and
identify the pages and/or exhibits or the transcript so designated.
All copies of transcripts thus designated shall be marked with a
notice indicating the confidentiality of the material therein and
shall be governed by the terms of this Protective Order.
Five depositions are at issue--David Hicks, Scott Montroy, Brian Blackman, John Neal,
and Allen Dodge. HG has agreed to withdraw the designation in its entirety with respect to the
depositions of David Hicks and Brian Blackman. HG’s Motion for Protection [Doc. # 429] at p.
3.
Concerning the deposition of Scott Montroy, HG seeks to designate only four pages as
confidential--page 13 line 14 through page 16 line 13. Although the deposition pages are not
provided for my review, HG states that they contain testimony about “Echo Star trade secret
litigation” which was settled subject to confidential terms. Email [Doc. #429-2].
MDx argues that the designation was not timely made and is waived.
Mr. Montroy was deposed on January 16, 2012. At the time of his deposition, the
following exchange occurred:
MR. VASQUEZ: Scott, to the extent your questions deal with
exhibits that are attorneys eyes only, I assume that these transcripts
won’t be shared with anybody other than the attorneys, right?
MR. STIMPSON: Whatever is under our so-called protective
order.
MR. VASQUEZ: A draft protective or hasn’t been entered.
MR. STIMPSON: Yeah.
MR. VASQUEZ: Well, that’s what I’m expecting whenever we
take depositions.

5

MR. STIMPSON: Yeah, we’re just operating under that.
Deposition of Scott Montroy [Doc. # 467-1] at p. 282 lines 11-23. There is no indication that
HG made any further written designation of the Montroy transcript as confidential within 14
days after receipt of the transcript.
There is no indication that the testimony of Mr. Montroy that HG seeks to make
confidential was based in any way on exhibits marked pursuant to the Protective Order as
attorneys eyes only. Consequently, whatever may have been designated as confidential as a
result of Mr. Vasquez’ statement at the start of the Montroy deposition, it did not sweep within
its terms Mr. Montroy’s testimony about a settlement in an unrelated matter. I agree with MDx
that HG failed to avail itself of the protections afforded by the Protective Order with respect to
the Montroy testimony, and any claim to confidentiality has been waived.
Concerning the deposition of John Neal, HG seeks to restrict access to the following:
Page 9 line 17 through page 12 line 20, concerning “[o]wnership interest”;
Page 62 lines 6-20, concerning “[b]usiness strategy”;
Page 70 line 12 through page 71 line 4, concerning “[r]evenues”;
Page 73 lines 3-11, concerning “[r]evenues, monetization strategy”; and
Page 74 lines 7-23, concerning “[r]evenues, monetization strategy.”
Email [Doc. # 429-2].
HG claims that the Neal deposition was designated as confidential “on the record,” HG’s
Motion for Protection [Doc. # 429] at p. 2, and has provided 32 pages of the Neal transcript in

6

support of the assertion.1 I have reviewed the materials submitted, and nowhere does MDx’s
counsel make any statement on the record, as required by §6.1.8 of the Protective Order, that any
portion of the testimony, or the entirety of it, is confidential. Nor does HG claim that such a
designation was made in writing within 14 days after receipt of the transcript. Once again, I
agree with MDx that HG failed to avail itself of the protections afforded by the Protective Order,
and any claim to confidentiality with respect to the Neal deposition has been waived.
Similarly, HG argues that it designated the deposition of Allen Dodge as confidential on
the record, HG’s Motion for Protection [Doc. # 429] at p. 2, and it attaches ten pages of the
transcript in support of the contention. But nowhere among the materials submitted is a
statement by HG’s counsel that any or all of the testimony is confidential. Nor does HG claim to
have made any confidentiality designation in writing within 14 days of receipt of the Dodge
transcript. HG failed to avail itself of the protections afforded by the Protective Order, and any
claim to confidentiality with respect to the Dodge deposition has been waived.
IT IS ORDERED:
(1)

MDx’s Motion for Protection [Doc. # 310] is GRANTED;

(2)

MDx’s Motion to Restrict Access [Doc. # 383] is GRANTED, and access to Doc.

## 340-1, 340-2, 340-3, 340-4, 340-5, 340-6, 340-7, 340-8, and 340-9 is RESTRICTED, LEVEL
1; and
(3)

HG’s Motion for Protection [Doc. # 429] is DENIED.

1

MDx states in its Response that “[a]t some depositions (not all) counsel for Health
Grades did attempt to globally designate” the testimony as confidential. Response [Doc. # 467].
The transcripts containing those global designations, or other details concerning them, have not
been provided, however.
7

Dated January 15, 2013.
BY THE COURT:
s/ Boyd N. Boland
United States Magistrate Judge

8