Union Pacific Railroad Company v. Colony National Insurance Company et al

Filing 82

ORDER denying 70 Plaintiff's Motion for a Protective Order. If desired, the parties may, consistent with the rulings herein, confer and jointly submit a stipulated protective order for entry by the Court. Ordered by Magistrate Judge F.A. Gossett. (SLP)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
UNION PACIFIC RAILROAD
COMPANY,
Plaintiff,
V.
COLONY NATIONAL INSURANCE
COMPANY, DEANGELO
BROTHERS, Inc., and AMERICAN
HOME ASSURANCE COMPANY,
Defendants.

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8:13CV84

ORDER

This matter is before the Court on Plaintiff’s Motion for a Protective Order. (Filing
70.) For the reasons explained below, Plaintiff’s motion will be denied.
BACKGROUND
Plaintiff brought this action against DeAngelo Brothers, Inc. (“DBI”) and DBI’s
insurers, Colony National Insurance Company (“Colony”) and American Home Assurance
Company (“American Home”), seeking indemnity for a 2006 train accident that occurred in
Oklahoma.
A confidential settlement agreement was reached in the underlying action involving
the bodily injury and wrongful death claims arising from the train accident. DBI was not a
party to the underlying action. Consequently, American Home and Colony have served
requests for production upon Plaintiff seeking documents related to that suit. Before
producing responsive documents, Plaintiff circulated a proposed protective order. While all
parties agree that a protective order is appropriate, American Home objects to the inclusion
of a provision which would require the parties to obtain a signed non-dissemination
agreement from insurers, reinsurers, retrocessionaires, regulators and accountants prior to
releasing confidential information to these groups.

DISCUSSION
Generally, parties may discover relevant, non-privileged information that is
reasonably calculated to lead to admissible evidence. Fed. R. Civ. P. 26. However, a court
may, for good cause, issue a protective order to prevent or limit discovery in order to “protect
a party or person from annoyance, embarrassment, oppression, or undue burden or expense.”
Id. The moving party bears the burden to “show the necessity of [the protective order’s]
issuance, which contemplates a particular and specific demonstration of fact, as distinguished
from stereotyped and conclusory statements.” Gen. Dynamics Corp. v. Selb Mfg. Co., 481
F.2d 1204, 1212 (8th Cir. 1973) (internal quotation omitted). When evaluating the need for
a protective order, courts must “include a consideration of the relative hardship to the nonmoving party should the protective order be granted.” Gen. Dynamics Corp., 481 F.2d at
1212. “Rule 26(c) confers broad discretion on the trial court to decide when a protective
order is appropriate and what degree of protection is required.” Seattle Times Co. v.
Rhinehart, 467 U.S. 20, 36 (1984).
In this case, all parties agree that a protective order is necessary. However, American
Home opposes the scope of Plaintiff’s proposed order. American Home argues that the
inclusion of a provision requiring insurers, reinsurers, retrocessionaires, regulators and
accountants to sign a non-dissemination agreement is overly burdensome and redundant.
American Home asserts that its third-party claim administer, AIG Claims, Inc. (“AIG
Claims”), as American Home’s affiliate, has already agreed to maintain the confidentiality
of any information submitted by American Home’s insureds. Moreover, American Home
contends it cannot demand that regulators and reinsurers sign a non-dissemination agreement
in the course of fulfilling their statutory and contractual obligations.
Plaintiff maintains that the non-dissemination provision is essential because the
discovery in this case may include the production of the confidential settlement agreement
reached in the underlying action, portions of defense counsel’s file in the underlying action,
as well as potential admissions concerning the train accident that have not been made public.
Plaintiff argues that if such information was obtained by a third party, it could be subject to
misinterpretation and manipulation, resulting in harm to Plaintiff. Plaintiff claims that, in
connection with other litigation, sensitive information of this nature has been disclosed, much
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to its detriment. In addition, Plaintiff contends that information sought regarding Plaintiff’s
contractual relationship with DBI is highly sensitive, in light of the competitive business
atmosphere in which both companies operate. Plaintiff argues that without a requirement
that third parties sign a non-dissemination agreement, the effectiveness of the protective
order would be compromised because Plaintiff would have no recourse against the thirdparties if they publicly disseminate Plaintiff’s confidential information.
Having reviewed the matter, the Court agrees with American Home that Plaintiff’s
proposed protective order, which includes a provision requiring third-parties to sign a nondissemination agreement, is unduly burdensome. The inclusion of this provision makes the
scope of the proposed protective order overly broad and sweeping. It would be extremely
difficult for American Home to comply with such a requirement, and enforcement of the nondissemination provision would be unworkable as it would be virtually impossible to police.
While the Court agrees that some sort of protective order is appropriate in this action, the
Court does not believe a provision requiring insurers, reinsurers, retrocessionaires, regulators
and accountants to sign a non-dissemination agreement is necessary to maintain the
confidentiality of information exchanged in this case.
Accordingly,
IT IS ORDERED that Plaintiff’s Motion for a Protective Order (filing 70) is denied.
If desired, the parties may, consistent with the rulings herein, confer and jointly submit a
stipulated protective order for entry by the Court.
DATED June 15, 2015.
BY THE COURT:
S/ F.A. Gossett
United States Magistrate Judge

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