In re: Consellior Sas, et al

Filing 60

DISCOVERY RULING sustaining the challenged redactions, and sustaining in part and overruling in part the challenged "highly confidential" designations Signed by Judge Holly B. Fitzsimmons on 01/10/2014.(Katz, Samantha)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
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In re: The Application of
CONSELLIOR SAS, KERFRAVAL,
ASSOCIATION DE DOCUMENTATION
POUR L’INDUSTRIE NATIONALE,
CFEB, SERGE BOUCHVAL and COLETTE
BOUCHVAL PURSUANT TO 28 U.S.C.
§ 1782 for an ORDER TO TAKE
DISCOVERY FOR USE IN A FOREIGN
PROCEEDING

13mc34(WWE)

DISCOVERY RULING
Respondent, Starwood Capital Group (“Starwood”), has
submitted for in camera review certain documents that have been
redacted and/or designated highly confidential.

Applicants,

Consellior SAS, Kerfraval, Association de Documentation Pour
L’Industrie Nationale, CFEB, Serge Bouchval, and Colette
Bouchval (collectively the “Applicants”), challenge the
redactions on seven (7) of these documents.

Applicants also

challenge the “highly confidential” designation given by
Starwood to six (6) documents.

For the reasons that follow, the

Court sustains the redactions, and sustains in part and
overrules in part the “highly confidential” designations.
Background
On March 26, 2013, after considering the ex parte
Application by Applicants for an Order Pursuant to 28 U.S.C. §
1782 to Take Discovery for use in a Foreign Proceeding, Judge
Eginton authorized the Applicants to take discovery from

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Starwood, Catterton Partners, Starwood Managing Director Steven
Hankin and Catterton Partners partner J. Michael Chu.
Specifically, the Order provided for discovery to use in a
proceeding in Nancy, France between Applicants and Baccarat, a
French corporation.

The French proceeding concerns an

investment transaction to increase Baccarat’s1 capital, which was
entered into between Starwood’s subsidiary, GdL, and Catterton
investment vehicle. Applicants are challenging this capital
increase transaction in France on the grounds that the vote
approving the transaction was improper under French law; that
the transaction was not in the best interests of Baccarat’s
common shareholders; and that the transaction was implemented to
benefit Starwood.
In connection with the discovery sought, the Court has held
numerous discovery conferences, and has issued two prior
discovery rulings.

See, e.g., Doc. ## 37, 43, 45, 50, 52. Most

recently, Applicants submitted to the Court a letter dated
December 27, 2013 setting forth several outstanding discovery
disputes with Starwood and Catterton.2

Specifically, Applicants

challenge certain redactions on documents produced by Starwood.
Applicants also challenge the “highly confidential” designation

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Applicants are minority shareholders in Baccarat. Starwood and Catterton
Partners own eighty eight percent (88%) of Baccarat.
2
This ruling will only address matters raised with respect to Starwood.
During the December 30, 2013 telephone conference, Applicants and Catterton
represented that they would endeavor to agree on the issues raised in
Applicants’ December 27, 2013 letter. [Doc. #55].
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given to certain documents. Starwood submitted in response a
letter dated December 30, 2013. Most recently, the Court held a
telephonic discovery conference on December 30, 2013, and
directed Starwood to provide the challenged documents for an in
camera review.

Starwood submitted the requested documents,

along with an explanatory letter dated December 30, 2013.
Applicants responded on December 31, 2013.

After reviewing the

challenged documents, and the parties’ additional letter briefs,
the Court held separate follow-up telephone conferences with
Starwood and Applicants.
Redactions
The seven (7) documents3 at issue have been redacted to
conceal information that Starwood determined to be not
responsive to Applicants’ subpoena duces tecum.

First,

Applicants generally take issue with Starwood’s “selective
redaction of information that it generally deems nonresponsive[…]” [App. Ltr. Dec. 27, 2013, at 2].

Applicants

further argue that the redactions are improper where the context
of each redaction suggests that the redaction is, in fact,
responsive.4

Starwood, in turn, argues that the redactions are

proper where the redacted information does not, inter alia,
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SCG_00001625-1628, SCG_00004262-4263, SCG_00007283-7285, SCG_00011188-11190,
SCG_00011275-11280, SCG_00011284-11289, and SCG_00011446-11452.
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Applicants’ subpoena seeks documents related to the Call for Bids (defined
by the subpoena as “the process of competitive bidding initiated by Baccarat
in 2011 to raise funds necessary to finance its development plan and proposed
investments.”) from potential investors in Baccarat, and to Catterton’s
investing in, and dealings with, Baccarat. [App. Dec. 31, 2013 Ltr., at Ex.
1].
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relate to the Call for Bids or Catterton’s investment in
Baccarat.
The seven (7) documents at issue are internal Starwood
emails between high-level Starwood executives. After careful
consideration of the parties’ submissions, and their arguments
during the telephone conferences, the Court finds the challenged
documents are properly redacted as non-responsive.

Although, as

Applicants submit, the redacted material is in close proximity
to responsive information, the Court agrees that this is not a
basis to speculate, or for that matter find, that the redacted
information is responsive.

Indeed, the Court’s review of the

challenged documents generally comports with the representations
made by Starwood in their December 30, 2013 letters that the
redactions relate to highly sensitive business information that
is not responsive to Applicants’ document requests.

Therefore,

the Court sustains the redactions for non-responsiveness.
Highly Confidential Designations
Applicants next challenge six (6) documents5 designated
“highly confidential” by Starwood.

Pursuant to the Protective

Order entered by Judge Eginton, a
Producing Party may designate any Discovery Material as
“Highly Confidential” under the terms of this Protective
Order if the Producing Party in good faith believes the
Discovery Material contains proprietary or other highly
sensitive business information the release of which to
other parties or the public would cause competitive or
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SCG_00004308-4310, SCG_00007312-7314, SCG_00011188-11190, SCG_0001128411289, SCG_00011307-11311, and SCG_00011446-11452.
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other serious and irreparable injury to the Producing
Party.

[Doc. #49, at ¶3].

“Highly confidential” documents differ from

“confidential” documents in that the former may not be
disclosed, or their contents otherwise communicated, to
Applicants. [Id. at ¶¶9-10]. Therefore, the use of such “highly
confidential” materials at depositions is constrained and will
“impact[] the Applicants’ right to be present for Highly
Confidential (sic) portions of upcoming depositions […] or to
review the transcript or video thereafter.” [App. Dec. 27, 2013
Ltr., at 3].

Aside from limiting Applicants at deposition,

Applicants further argue that the challenged documents contain,
at most, “confidential” information.6 Starwood argues that the
“highly confidential” designation is proper where the documents
meet the requirements for a “highly confidential” designation
under the Protective Order because the documents contain
proprietary or other highly sensitive business information, the
release of which would cause Starwood competitive or other
serious and irreparable injury.
The six (6) challenged documents are also internal Starwood
emails between high-level Starwood executives.

For the most

part, the subject emails contain detailed business strategy,
6

Under the Protective Order, a producing party may designate documents as
confidential, if the “Producing Party reasonably believes in good faith that
such Discovery Material contains non-public, confidential, personal, or
commercially sensitive information that meets the requirements of Federal
Rule of Civil Procedure 26(c) for the protections provided in this Protective
Order.” [Doc. #49, at ¶3].
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negotiation strategy, business insight, and/or Starwood’s’
executives’ analysis of internal business matters.

The Court

agrees with Starwood that the majority of the challenged
documents are properly designated “highly confidential.”

For

example, if the balance of this information were disclosed to
third parties and/or the public, such parties could easily
undermine Starwood’s highly sensitive business, investment
and/or negotiation strategies.

To the extent that Applicants

argue the same information has been disclosed as “confidential”
on other documents, the Court generally disagrees.

Having

reviewed the documents, the Court finds more extensive analysis
and insight in five (5) of the documents than in the previously
disclosed documents designated “confidential.”

However, the

Court does agree that some of the information set forth in the
challenged documents should not be considered “highly
confidential” where it has, in fact, previously been disclosed
and designated as “confidential.”

For that reason, the Court

finds that certain portions of the challenged documents should
be redesignated as “confidential.”

Accordingly, after careful

consideration of the parties’ submissions and their arguments
during the telephone conferences, the Court sustains Starwood’s
“highly confidential” designations for document SCG_00011446611452, and sustains in part and overrules in part the “highly
confidential” designations for documents SCG_00004308-4310,

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SCG_00007312-7414, SCG_00011284-11289, and SCG_00011307-11311.
Specifically, the Court overrules the “highly confidential”
designation only for the limited portions of these documents
that list the nine proposed investors, i.e. starting after
“Greater China based investors” and concluding with “[…]
supported in China by David Chu.” (SCG_00004308-4309;
SCG_00007312-7313; SCG_00011287; SCG_00011309).

The remaining

content of these documents shall remain designated as “highly
confidential.”
With respect to document SCG_00011188-11190, the Court
overrules Starwood’s designation, and finds that this document
as redacted should be deemed “confidential.”

Indeed, the non-

redacted information in this document does not reflect the level
of detail contained in the other challenged documents.

Although

this document does discuss Starwood’s process for courting
investors, it by no means divulges such a level of detail that
one could consider the information “proprietary” or “highly
sensitive.”

Accordingly, the Court overrules the designation

applied to this document and finds, instead, that as redacted it
is properly designated as “confidential.”
This is not a Recommended Ruling. This is a discovery
ruling or order which is reviewable pursuant to the “clearly
erroneous” statutory standard of review. 28 U.S.C. §
636(b)(1)(A); Fed.R.Civ.P. 72(a); and D. Conn. L. Civ. R. 72.2.

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As such, it is an order of the Court unless reversed or modified
by the district judge upon motion timely made.
ENTERED at Bridgeport, this 10th day of January 2014.

______/s/__________________
HOLLY B. FITZSIMMONS
UNITED STATES MAGISTRATE JUDGE

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