Young v. Medical Informatics Engineering, Inc.

Filing 37

OPINION AND ORDER For the reasons set forth in the Opinion and Order, the Court will not enter the parties' stipulated protective order of confidentiality [24-1]. The parties may submit a revised proposed protective order consistent with the requirements of Rule 26(c) and Seventh Circuit case law. Signed by Magistrate Judge Susan L Collins on 2/3/16. Associated Cases: 3:15-md-02667-RLM-SLC et al.(jld)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
IN RE: MEDICAL INFORMATICS
ENGINEERING, INC., CUSTOMER
DATA SECURITY BREACH
LITIGATION (MDL 2667)
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This Document Relates to All Cases
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CAUSE NO. 3:15-md-02667-RLM-SLC

OPINION AND ORDER
Before the Court is a stipulated protective order of confidentiality, filed jointly by the
parties, who seek approval and entry of a proposed agreed protective order pursuant to Federal
Rule of Civil Procedure 26(c). (DE 24-1). Because the proposed order is inadequate in several
ways, the Court will not enter the proposed order.
Rule 26(c) allows the Court to enter a protective order for good cause shown. See
Citizens First Nat’l Bank of Princeton v. Cincinnati Ins. Co., 178 F.3d 943, 946 (7th Cir. 1999).
A protective order, however, must only extend to “properly demarcated categor[ies] of
legitimately confidential information.” Id.; see MRS Invs. v. Meridian Sports, Inc., No. IP 991954-C-F/M, 2002 WL 193140, at *1 (S.D. Ind. Feb. 6, 2002) (rejecting proposed protective
order because categories of protected information were overly broad and vague); Cook, Inc. v.
Boston Sci. Corp., 206 F.R.D. 244, 248-49 (S.D. Ind. 2001) (same); Andrew Corp. v. Rossi, 180
F.R.D. 338, 342 (N.D. Ill. 1998) (same).
Here the proposed order fails to set forth narrow, demarcated categories of legitimately
confidential information. Instead it allows a party to designate material confidential if it
“contains: (a) trade secrets, competitively sensitive technical, marketing, licensing, research and
development, financial, sales or other proprietary or confidential business information; (b)

private or confidential personal information; (c) information received in confidence from third
parties; or (d) information that the producing party otherwise believes in good faith to be entitled
to protection under Rule 26(c)(1)(G) of the Federal Rules of Civil Procedure.” (DE 24-1 ¶ 2).
The Seventh Circuit has repeatedly held that such overly broad protective orders are invalid.1
See, e.g., Cincinnati Ins. Co., 178 F.3d at 945 (noting that a broad protective order granting carte
blanche discretion to a party is invalid).
“If the parties seek non-trade secret protection for any . . . information, they must present
reasons for protection and criteria for designation other than simply that the information is not
otherwise publicly available.” Cook, Inc., 206 F.R.D. at 249. “They must describe a category or
categories of information and show that substantial privacy interests outweigh the presumption of
public access to discovery material.” Id. For material to be protected, it “must give the holder an
economic advantage and threaten a competitive injury—business information whose release
harms the holder only because the information is embarrassing or reveals weaknesses does not
qualify for trade secret protection.” Id. at 248. Accordingly, “merely asserting that a disclosure
of the information ‘could’ harm a litigant’s competitive position is insufficient; the motion must
explain how.” Shepard v. Humke, IP 01-1103-C-H/K, 2003 WL 1702256, at *1 (S.D. Ind. Mar.
28, 2003) (citing Baxter Int’l, Inc., 297 F.3d at 547).
In addition, paragraph 2 of the proposed order enables a party to designate information as

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“[T]he same scrutiny is not required for protective orders made only for discovery as for those that permit
sealed filings.” Containment Techs. Grp., Inc. v. Am. Soc’y of Health Sys. Pharmacists, No. 1:07-cv-997-DFHTAB, 2008 WL 4545310, at *3 (S.D. Ind. Oct. 10, 2008). See also Baxter Int’l, Inc. v. Abbot Labs., 297 F.3d 544,
545 (7th Cir. 2002) (“Secrecy is fine at the discovery stage, before the material enters the judicial record. But those
documents, usually a small subset of all discovery, that influence or underpin the judicial decision are open to public
inspection unless they meet the definition of trade secrets or other categories of bona fide long-term confidentiality.”
(citations omitted)). Because the proposed order in this case contemplates sealed filings, it requires a higher level of
scrutiny.

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confidential provided it “believes in good faith” that the information is “entitled to protection
under Rule 26(c)(1)(G) . . . .” (DE 24-1 ¶ 2). But this is a “fudge” phrase that compounds the
vagueness of the proposed order. See Cincinnati Ins. Co., 178 F.3d at 944 (emphasizing that the
word “believed” incorporated into the phrase “believed to contain trade secrets” is a “fudge”);
Shepard, 2003 WL 1702256, at *1 (articulating that a party’s attempt to qualify a “fudge” word
by the phrase “in good faith” fails to sufficiently cure the deficiency).
Another problem is that the proposed order allows documents that “contain” Confidential
Information to be filed entirely under seal (DE 24-1 ¶¶ 2, 16), rather than solely protecting the
actual Confidential Information through redaction. See Cincinnati Ins. Co., 178 F.3d at 945
(stating that an order sealing documents containing confidential information is overly broad
because a document containing confidential information may also contain material that is not
confidential, in which case a party’s interest in maintaining the confidential information would
be adequately protected by redacting only portions of the document).
Additionally, the language in paragraph 15 of the proposed order is unclear. This
paragraph provides the procedure to be followed in a situation where one party desires to disclose
Confidential Information—over the objection of the producing party—to any person or category
of persons who are not included in paragraph 8’s approved categories for disclosure. In such a
situation, paragraph 15 states that “the party desiring to make disclosure shall move this Court
for an order that such person or category of person personally signs and dates the Endorsement of
the Protective Order attached hereto and otherwise complies with Paragraph 7 above and such
other terms as the Court may impose.” (DE 24-1 ¶ 15). The Court is not inclined to order
individuals outside of this lawsuit to sign an endorsement of the protective order if the
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individuals refuse to sign. However, the language of this paragraph leads the Court to believe
that perhaps the parties’ intent was for the Court to rule that disclosure of Confidential
Information to the person or category of persons at issue was permissible, so long as the persons
receiving access to the Confidential Information sign the endorsement of the protective order.
The Court will not enter a protective order containing such ambiguous language and therefore
suggests that the parties clarify their intent in this paragraph when submitting a revised proposed
protective order.
The next problem in the proposed order is paragraph 16’s statement that the filing of any
Confidential Information with the Court “shall comply with Local Rule 5-3 and shall be filed in
sealed envelopes or other appropriate sealed containers . . . .” (DE 24-1 ¶ 16). Local Rule 53(c)(1) states, “[t]o file a sealed document . . . in a civil case, a party must file it electronically as
required by the CM/ECF User Manual.” N.D. Ind. L.R. 5-3(c)(1). Thus, the local rules
expressly require sealed documents to be filed electronically. The parties shall not file
Confidential Information with the Court in sealed envelopes or containers, which would be in
contravention of the local rules, without express permission from the Court. See N.D. Ind. L.R.
1-1(c).
In addition, paragraph 20 of the proposed order states that “the Protective Order may be
modified by consent of the parties in writing.” (DE 24-1 ¶ 20). The terms of the protective order
cannot be modified without the Court’s approval. Any modifications to the terms of the
protective order are subject to the same requirements for the Court’s initial approval and entry of
a protective order, specifically that good cause exists and that the various safeguards required by
the Seventh Circuit are met. See Shepard, 2003 WL 1702256, at *2 (emphasizing that a
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protective order “may not issue absent an appropriate showing of good cause, as well as
adherence to the other limitations the Seventh Circuit has emphasized apply to such orders”).
Paragraph 20 of the proposed protective order further states that “[t]his Protective Order
shall survive the termination of this action and shall remain in full force and effect unless
modified by an order of this Court or by the written stipulation of the parties approved by the
Court.” (DE 24-1 ¶ 20). The Court, however, is unwilling to enter a protective order that
suggests it retain jurisdiction of any kind after resolution of the case. See E.E.O.C. v. Clarice’s
Home Care Serv., Inc., No. 3:07-cv-601 GPM, 2008 WL 345588, at *2 (S.D. Ill. Feb. 7, 2008)
(encouraging the parties to make a contractual agreement among themselves for the return of
sensitive documents without court oversight); see also Large v. Mobile Tool Int’l, Inc., No. 1:02CV-177, 2010 WL 3120254, at *1 (N.D. Ind. Aug. 6, 2010).
Another problem with the proposed order is that the parties’ process for the return and
destruction of Confidential Information does not provide an exception for the Court. A lengthy
paragraph describes the process, which requires that “[w]ithin 30 calendar days of the conclusion
of this MDL, including any appeals related thereto, all materials marked as ‘Confidential’ or
‘Confidential Information – Attorneys’ Eyes Only’ shall be returned to the producing party or
destroyed.” (DE 24-1 ¶ 21). The Court does not return any documents that have been made part
of the record.
Finally, the Seventh Circuit Court of Appeals has made it clear that a protective order
must be “explicit that either party and any interested member of the public can challenge the
secreting of particular documents.” Cincinnati Ins. Co., 178 F.3d at 946. The instant proposed
order, however, does not contain this language. In sum, “the public at large pays for the courts
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and therefore has an interest in what goes on at all stages of a judicial proceeding.” Id. at 945.
For these reasons, the Court will not enter the parties’ stipulated protective order of
confidentiality (DE 24-1). The parties may submit a revised proposed protective order consistent
with the requirements of Rule 26(c) and Seventh Circuit case law.
SO ORDERED.
Entered this 3rd day of February 2016.
/s/ Susan Collins
Susan Collins,
United States Magistrate Judge

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