Dieterich v. Stellar Recovery, Inc.
Filing
26
ORDER granting in part and denying in part 19 Motion to Maintain Confidential Designation of Information and Documents Pursuant to the Protective Order and 22 Notice of Additional Material. by Magistrate Judge Boyd N. Boland on 2/20/13.(bnbcd, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Magistrate Judge Boyd N. Boland
Civil Action No. 12-cv-02464-WYD-BNB
RHONDA DIETERICH,
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. # 19, filed 1/28/2013]
and Notice of Additional Material [Doc. # 22, filed 2/13/2013] ( collectively 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. # 12]. 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. # 12] 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.
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Id. at ¶9.
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. # 19] 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 p. 4; the defendant “has incurred substantial time and
resources developing these policies and procedures over years,” id.; 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.
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.
The defendant does not claim that disclosure of the information designated as
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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 00001 through 00004. This document is captioned “Account History” and
contains the defendant’s account notes.
Document 00005 through 00044. 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 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.
1
The defendant tendered copies of the disputed documents for in camera review, and I
have completed my review of those documents.
4
However, the employees do not sign confidentiality agreements requiring them to maintain the
information as confidential.
Document 00045 through 46 and 71 through138. 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. 00078); 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; tips for success and computer
screen shots. 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 00139 through 140. This is the General Terms and Conditions of the
defendant’s general liability insurance policy.
Document 00229 through 00242. This is the defendant’s errors and omissions
Insurance policy. The defendant acknowledges that this information is not confidential.
Document 00243 through 00248. This is the defendant’s application for errors and
omissions insurance. It contains at Bates No. 00245 confidential financial information
concerning the defendant’s business, but no other confidential information.
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On review, and with the exception of (1) the defendant’s Western Union contact
information, including its account number (Bates No. 00078) and (2) the defendant’s
confidential financial information contained in its application for insurance (Bates No. 00245),
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 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, screen shots of the defendant’s computer system, 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.
The defendant has acknowledged that its insurance policies are not confidential.
By contrast, the defendant’s (1) Western Union contact information, including its account
number (Bates No. 00078) and (2) confidential financial information contained in its application
for insurance (Bates No. 00245), are entitled to protection from public disclosure in view of their
confidential nature.
IT IS ORDERED that the Motion for Protective Order [Doc. ## 19 and 22] is GRANTED
IN PART and DENIED IN PART as follows:
•GRANTED to maintain the confidential designation of the defendant’s (1) Western
Union contact information, including its account number (Bates No. 00078) and (2) confidential
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financial information contained in its application for insurance (Bates No. 00245); and
•DENIED in all other respects.
Dated February 20, 2013.
BY THE COURT:
s/ Boyd N. Boland
United States Magistrate Judge
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