Arthur J. Gallagher & Co. v. O'Neill
Filing
129
ORDER AND REASONS granting 112 MOTION for APPEAL OF MAGISTRATE JUDGE DECISION to District Court. ORDERED that the Protective Order be narrowed in scope to (1) communications regarding solicitation of business from any of Gallagher's clients o r former clients; (2) communications prior to the transfer of business; (3) communications after the transfer of business that reference or concern O'Neill or Gallagher; (4) communications between O'Neill and other Marsh employees that refe rence or concern Gallagher or any current or former clients of Gallagher; (5) communications between O'Neill and current and former clients of Gallagher; and (6) communications referencing information that Gallagher alleges O'Neill improperly disclosed. Signed by Judge Martin L.C. Feldman on 12/20/2018. (clc)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ARTHUR J. GALLAGHER & CO.
CIVIL ACTION
V.
NO. 17-2825
BRIAN D. O’NEILL
SECTION "F"
ORDER AND REASONS
Before the Court is Marsh USA’s expedited motion to review
Magistrate Judge Wilkinson’s November 27, 2017 Order and Reasons.
For the following reasons, the motion is GRANTED.
Background
Brian O’Neill worked for Arthur J. Gallagher & Co. On April
19, 2007, O’Neill executed an Executive Agreement that prohibited
O’Neill from soliciting or providing service to some of Gallagher’s
customers for two years in the event that O’Neill left the company
for any reason. Additionally, O’Neill signed the 2011 Long-Term
Incentive Plan Stock Option Award Agreement on April 5, 2013, which
prohibited O’Neill from competing with Gallagher or disclosing any
confidential information after his departure from the company.
O’Neill
resigned
from
Gallagher
on
May
27,
2016.
Shortly
thereafter, he accepted a position with Marsh USA, a competitor of
Gallagher.
1
Gallagher sued O’Neill on April 3, 2017, alleging that he
breached
the
employment
agreements.
The
parties
have
since
proceeded through most of discovery, although the process has been
vexatious and bitter. However, there is an ongoing dispute about
disclosure of documents by Marsh, a non-party. Gallagher issued a
subpoena duces tecum to Marsh in May. Marsh opposed it, claiming
that the documents contained confidential information and trade
secrets.
Eventually,
Magistrate
Judge
Wilkinson
entered
a
Protective Order, which mandates that any confidential documents
may only be used to litigate this matter; not for business or
competitive purposes. In response, Marsh made rolling productions
from August to October, but many of the thousands of documents
contained substantial redactions. Gallagher filed several motions
for contempt, demanding that Marsh produce unredacted documents in
compliance with the Protective Order. Magistrate Judge Wilkinson
completed an in camera review of a sample of the redacted document
and found in his November 6, 2017 Order and Reasons that redactions
were justified in some cases, but not in others. Marsh was required
to produce some of those documents unredacted, but Magistrate Judge
Wilkinson amended the Protective Order to permit only two Gallagher
employees—both executives—to view the documents. In Magistrate
Judge Wilkinson’s November 27, 2017 Order and Reasons, he amended
the Protective Order to require that Marsh remove its redactions
from all documents when the redactions include references to: (1)
2
Gallagher and the activities of O’Neill; (2) Marsh’s dealings with
Gallagher’s former and current clients; and (3) O’Neill competing
with
Gallagher.
Marsh
requests
the
Court
to
review
Judge
Wilkinson’s November 27, 2017 Order and Reasons.
I.
Legal Standard
Pursuant to Federal Rule of Civil Procedure 72(a), a party
may appeal the ruling of the Magistrate Judge to the District
Judge. A magistrate judge is afforded broad discretion in the
resolution of non-dispositive motions. See Fed. R. Civ. P. 72(a);
see
also
28
U.S.C.
§ 363(b)(1)(A).
If
a
party
objects
to
a
magistrate judge’s ruling on a non-dispositive matter, the Court
will disturb a magistrate’s ruling only when the ruling is “clearly
erroneous or is contrary to law.” See Fed. R. Civ. P. 72(a); see
also Castillo v. Frank, 70 F.3d 382, 385 (5th Cir. 1995). A finding
is "clearly erroneous" when the reviewing Court is "left with the
definite and firm conviction that a mistake has been committed."
United States v. Stevens, 487 F.3d 232, 240 (5th Cir. 2008)(quoting
United States. v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948)).
II.
Discussion
The protective order, as amended in the November 27, 2017
Order
and
Reasons,
causes
unproportional
harm
to
Marsh.
The
protective order would force Marsh to reveal information that would
3
expose valuable trade secrets to Marsh’s direct competitor while
only
slightly,
if
at
all,
supporting
Gallagher’s
claims.
Accordingly, the Protective Order must be amended to limit the
scope of Marsh’s disclosures.
Marsh contends that the protective order is overly broad. It
asserts that by requiring disclosure of all of its communications
with
Gallagher’s
former
clients,
Marsh
would
be
required
to
disclose sensitive information that is not relevant to Gallagher’s
claims.
Gallagher
agreement
by
claims
divulging
that
O’Neill
confidential
violated
its
information,
executive
soliciting
Gallagher’s clients, and servicing the accounts of Gallagher’s
former
clients,
Offshore
Liftboats
and
Offshore
Marine
Contractors. Marsh contends that any information between Marsh
employees and Offshore Liftboats and Offshore Marine Contractors
is
irrelevant
to
Gallagher’s
solicitation
claims
because
the
companies already transferred their business. Once transferred,
there is nothing to solicit. Moreover, after Offshore Liftboats
and Offshore Marine Contractors transferred their business by
executing a broker of records letter, Marsh had unfettered access
to Gallagher’s alleged confidential information, such as renewal
dates, pricing, and structure from the clients. Accordingly, Marsh
argues that production of unredacted documents should be limited
to communications before the business was transferred or involving
O’Neill. It does not object to communications involving O’Neill or
4
Gallagher’s former clients, but it does object to communications
between Marsh’s other employees and its clients. Marsh requests
that
the
protective
communications
communications
order
regarding
prior
to
be
narrowed
solicitation
the
transfer
in
scope
of
of
to:
“(1)
business;
(2)
business;
and
(3)
communications regarding the confidential information Gallagher
alleges O’Neill disclosed, i.e. references to Gallagher’s pricing,
structure, renewal dates, and points of contact.” Marsh also agrees
to produce communications made after the business was transferred
that reference Gallagher’s fee structure.
Gallagher
asserts
that
communications
between
two
former
Gallagher clients—Marsh and Offshore Liftboats and Offshore Marine
Contractors—following their transfer of business are relevant. It
contends that the communications may show that: (1) O’Neill was
involved
or
is
currently
involved
in
servicing
the
accounts
following the transfer; (2) other employees at Marsh received
assistance from O’Neill on their accounts; (3) O’Neill directly
communicated with clients regarding their insurance business; and
(4) O’Neill continued to disclose confidential information to
Marsh. Gallagher presents valid concerns, but Marsh has already
agreed
to
disclosed
disclose
all
most
of
communications
this
information.
between
O’Neill
Marsh
already
and
Offshore
Liftboats and Offshore Marine Contractors, Marsh employees and
Offshore Liftboats and Offshore Marine Contractors that reference
5
O’Neill, and O’Neill and Marsh employees that reference Offshore
Liftboats and Offshore Marine Contractors. These disclosures give
Gallagher
access
to
communications
that
may
show
O’Neill
is
involved in servicing accounts with Gallagher’s former clients,
assisting
Marsh
employees
from
servicing
those
accounts,
or
communicating with clients regarding their business. 1 Finally,
Marsh
agrees
Gallagher’s
to
disclose
confidential
any
information
information,
that
alleviating
references
Gallagher’s
fourth concern.
In its sur-reply, Gallagher submitted compelling evidence
supporting its claim that O’Neill shared confidential information
with
Marsh. 2
The
Court
recognizes
that
Marsh
had
previously
redacted documents that may prove essential to Gallagher’s claims.
The Protective Order, as is, requires Marsh to disclose those
documents. But it may also require Marsh, a non-party, to disclose
highly sensitive documents that do little to support Gallagher’s
claims but may expose Marsh to an unfair competitive disadvantage.
Further, the Protective Order can be amended to better address
1
Marsh does not object to disclosing communications that relate
to O’Neill soliciting clients before they transfer business, and
submits that they have already disclosed any communications
between O’Neill and Gallagher’s former clients after they
transferred their business to Marsh.
2 Those documents were previously unredacted; Marsh disclosed them
earlier this week.
6
Marsh’s
concerns
while
still
protecting
Gallagher’s
right
to
Protective
Order
be
discovery. 3
According,
IT
IS
ORDERED:
that
the
narrowed in scope to: (1) communications regarding solicitation of
business from any of Gallagher’s clients or former clients; (2)
communications
prior
to
the
transfer
of
business;
(3)
communications after the transfer of business that reference or
concern O’Neill or Gallagher; (4) communications between O’Neill
and other Marsh employees that reference or concern Gallagher or
any current or former clients of Gallagher; (5) communications
between O’Neill and current and former clients of Gallagher; and
(6) communications referencing information that Gallagher alleges
O’Neill improperly disclosed.
New Orleans, Louisiana, December 20, 2017
______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE
3
The Court has discretion to “protect a person subject to or
affected by a subpoena” from “disclosing a trade secret or other
confidential research, development, or commercial information.”
Fed. R. Civ. Pro. 45(d)(3)(B).
7
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