Howard v. Stellar Recovery, Inc.
Filing
55
ORDER granting in part and denying in part 49 Motion to Maintain Confidential Designation of Information and Documents Pursuant to the Protective Order. by Magistrate Judge Boyd N. Boland on 2/19/13.(bnbcd, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Magistrate Judge Boyd N. Boland
Civil Action No. 12-cv-01207-RPM-BNB
GORDON HOWARD,
Plaintiff,
v.
STELLAR RECOVERY, INC., a Florida corporation,
Defendant.
______________________________________________________________________________
ORDER
______________________________________________________________________________
This matter arises on Defendant’s Motion to Maintain Confidential Designation of
Information and Documents Pursuant to the Protective Order [Doc. # 49, filed 1/28/2013]
(the “Motion for Protective Order”).
This case involves claims under the Fair Debt Collection Practices Act. At the parties’
request, I entered a blanket protective order to facilitate the conduct of discovery. Protective
Order [Doc. # 14]. The blanket Protective Order allows a party to designate as confidential
information and materials disclosed to the other party during the discovery process. Information
designated as confidential is subject to the following restrictions:
3. The confidential information discussed in ¶1 above, and all
tangible embodiments thereof, all copies thereof, and substance
thereof, and all information contained therein (hereinafter
collectively referred to as “Confidential Material”):
(a) shall not be disclosed or distributed by counsel, or any other
person receiving, viewing or hearing the Confidential Material
(“Receiving Person”) to any person other than to (1) counsel for
either party as identified in ¶8 below, (2) insurance carriers for
either party, (3) partners, employees and agents of counsel for
either party, (4) any consulting or testifying experts hired by
counsel for either party, who are assisting counsel in preparation of
this action for trial (subject to ¶3(c) below), (5) the Court and its
employees, and (6) Plaintiff (“Plaintiff”) and Defendant (the
“Defendant”), its officers, directors and employees;
(b) shall be filed with the Court, should filing be desired or
required, in accordance with D.C.COLO.LCivR 7.2; and,
(c) shall not be disclosed to any consulting or testifying expert
unless the party making the disclosure follows the provisions of ¶5
of this Protective Order [requiring the execution of declaration by
the expert agreeing to maintain the confidentiality of the
information].
Protective Order [Doc. # 14] at ¶3.
The blanket Protective Order contains a mechanism by which a party may challenge the
designation of information as confidential, as follows:
A party may object to the designation of particular Confidential
Material by giving written notice to the party designating the
disputed information. The written notice shall identify the
information to which the objection is made. If the parties cannot
resolve the objection within ten (10) business days after the time
the notice is received, the party designating the information as
CONFIDENTIAL shall have the obligation to file an appropriate
motion requesting that the Court determine whether the disputed
information should be subject to the terms of this Protective Order.
If such a motion is timely filed, the disputed information shall be
treated as CONFIDENTIAL under the terms of this Protective
Order until the Court rules on the motion. If the designating party
fails to file such a motion within the prescribed time, the disputed
information shall lose its designation as CONFIDENTIAL and
shall not thereafter be treated as CONFIDENTIAL in accordance
with this Protective Order. In connection with a motion filed
under this provision, the party designating the information as
CONFIDENTIAL shall bear the burden of establishing that good
cause exists for the disputed information to be treated as
CONFIDENTIAL.
Id. at ¶9.
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The plaintiff claims that virtually all documents produced in this case initially were
designated as confidential. Apparently any dispute concerning over-designation has been
resolved with the exception of the documents at issue here.
The Motion for Protective Order [Doc. # 49] is conclusory. In general, the defendant
argues that the debt collection business is “extremely competitive,” id. at p.3; the defendant “has
a reasonable expectation of privacy with respect to their [sic] policies and procedures and the
training given to its employees,” id. at pp. 3-4; the defendant “has incurred substantial time and
resources developing these policies and procedures over years,” id. at p. 4; the information
marked as confidential “may arguably constitute trade secret information,” id.; and “it is not
inconceivable that dissemination” of the defendant’s insurance policies “may be detrimental to
the insurance carrier’s business.” Id. The affidavit of Bob B. Peterson, executive vice-president
of the defendant, offered during argument on the Motion for Protective Order, generally recites
the same arguments with no greater factual specificity.
Rule 26(c)(1), Fed. R. Civ. P., provides that a party may obtain a protective order on a
showing of good cause to “protect a party or person from annoyance, embarrassment,
oppression, or undue burden or expense” and to protect “a trade secret or other confidential
research, development, or commercial information.” Conclusory assertions are insufficient to
show good cause. “Instead, the party seeking a protective order must show that disclosure will
result in a clearly defined and serious injury to the party seeking protection.”
Exum v. United
States Olympic Committee, 209 F.R.D. 201, 206 (D. Colo. 2002)(internal citations omitted). “In
the absence of a showing of good cause for confidentiality, the parties are free to disseminate
discovery materials to the public.” Id.
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The defendant does not claim that disclosure of the information designated as
confidential would result in annoyance, embarrassment, oppression, or undue burden or expense.
It argues that the information is confidential because it contains trade secrets and other business
information the disclosure of which would result in competitive disadvantage. In order to
establish the existence of a trade secret or other confidential information entitled to protection,
the movant must show:
(1) the extent to which the information is known outside the
business; (2) the extent to which it is known to those inside the
business, i.e., by the employees; (3) the precautions taken by the
holder of the trade secret to guard the secrecy of the information;
(4) the savings effected and the value to the holder in having the
information as against its competitors; (5) the amount of effort or
money expended in obtaining and developing the information; and
(6) the amount of time and expense it would take for others to
acquire and duplicate the information.
Hertz v. Luzenac Group, 576 F.3d 1103, 1108 (10th Cir. 2009).
At issue here are the following:1
Document 00004 through 00046. This document is captioned “Fair Debt Collection
Practices Act (FDCPA) Study Guide.” It appears to summarize the defendant’s interpretation of
the requirements of the FDCPA; provide tips on collecting Comcast debts; contain an index of
the codes used in connection with the defendant’s collection notes; and contain a copy of the
defendant’s employee handbook. Defense counsel asserted at argument that employees are
required to sign for receipt of these materials and return them to the defendant when they leave
the defendant’s employment. However, the employees do not sign confidentiality agreements
1
The defendant tendered copies of the disputed documents for in camera review, and I
have completed my review of those documents.
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requiring them to maintain the information as confidential.
Document 00053 through 54 and 79 through143. This document is captioned “Stellar
Recovery, Inc., Blue Book.” It includes the defendant’s Settlement Process Steps; PPA Sweep
Guidelines; Western Union contact information, including the defendant’s account number
(Bates No. 00086); blank forms including (a) Media/Title Request, (b) Legal Referral
Coversheet, (c) Involuntary Repo, (d) Receipt for Cash Payment, and (e) Refund Request; form
collection letters; area code/time zone chart; employee action plan form; collection scripts; a list
of potential money sources available to a debtor; possible means for a debtor to transmit
payments; Call Monitoring Scorecard; collection note codes; and tips for success. The materials
include the acknowledgment form signed by employees when they receive the Blue Book, which
does not include a confidentiality provision and provides merely:
I hereby acknowledge that I have received and read my copy of the
Stellar Recovery Inc Blue Book. In consideration of my
employment, I agree to conform to and comply with the policies,
procedures, and statements of Stellar Recovery, Inc. I understand
the policies and procedures described herein may be modified by
Stellar Recovery, Inc. at any time.
Document 00181. This document is a screen shot of the defendant’s
computerized Account Work Form.
Document 00298. This is a collection form letter.
On review, and with the exception of the defendant’s Western Union contact
information, including its account number (Bates No. 00086), the information is not a trade
secret, competitively sensitive, nor would its disclosure put the defendant at a competitive
disadvantage. Most of the information is well known generally, and certainly well known within
the debt collection industry. For example, collection form letters are sent by the thousands to
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members of the public, and there is nothing confidential about them. The same is true with
respect to the collection scripts. There is nothing confidential about an area code/time zone
chart, blank forms, the screen shot of the defendant’s computerized Account Work Form, or the
index of codes used in the defendant’s collection notes . The defendant employs minimal, if any,
precautions to prevent the disclosure of this information. The defendant has failed to identify
specifically the documents that it claims required “substantial time and resources” to develop
“over years,” and that assertion is belied by the contents of the documents provided for review.
By contrast, the Western Union contact information, which includes the defendant’s
account number (Bates No. 00086), is entitled to protection from public disclosure in view of the
potential for misuse and misappropriation of funds.
IT IS ORDERED that the Motion for Protective Order is GRANTED IN PART and
DENIED IN PART as follows:
•GRANTED to maintain the confidential designation of the document containing the
defendant’s Western Union contact information, including its account number (Bates No.
00086); and
•DENIED in all other respects.
Dated February 19, 2013.
BY THE COURT:
s/ Boyd N. Boland
United States Magistrate Judge
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