Gibson v. State Farm Mutual Auto Insurance Company et al

Filing 18

ORDER that a temporary protective order regarding designating documents as confidential in discovery is entered (see Order for specifics). Signed by Magistrate Judge Peggy A. Leen on 7/15/2013. (Copies have been distributed pursuant to the NEF - SLD)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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JAMES B. GIBSON,

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Plaintiff,
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vs.
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STATE FARM MUTUAL AUTO INSURANCE )
COMPANY, et al.,
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Defendants. )
__________________________________________)

Case No. 2:13-cv-00650-MMD-PAL
ORDER

The court conducted a status and dispute resolution conference with the parties on July 8, 2013.

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Matt Minucci appeared on behalf of the Plaintiff, and Ryan Dennett appeared on behalf of the

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Defendants.

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BACKGROUND

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At a scheduling conference held June 11, 2013, the court reviewed counsels’ proposed

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Discovery Plan and Scheduling Order (Dkt. #11) and asked counsel why they believed special

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scheduling review was necessary. Counsel for the parties indicated they anticipated discovery disputes

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related to State Farm’s request that the parties execute a stipulated protective order governing

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confidentiality for documents that State Farm would be producing in discovery. The court required

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counsel to meet and confer and to submit a joint status report outlining their respective positions with

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sufficient specificity to allow the court to resolve the matter without the necessity of further briefing.

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The parties submitted a Joint Status Report (Dkt. #16) indicating they had not been able to agree on a

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resolution of this dispute. Plaintiff’s position is that it is improper for Defendants to require Plaintiff to

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sign a confidentiality agreement to obtain discovery that is not privileged. The claims file, claims

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manual, claims notes and impressions of adjusters are not privileged or confidential, and blanket

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protective orders are inherently improper. Plaintiff also argues that State Farm has the burden of

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establishing that any documents it seeks to protect as “confidential” are entitled to protection from

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disclosure.

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State Farm argues that it has the right to protect its confidential, proprietary, and trade secret

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information as well as the privacy of its employees. This right is accomplished by designating certain

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documents as “confidential” to protect its interests while still permitting the Plaintiff to obtain the

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documents in discovery for purposes of this lawsuit. The court has substantial latitude to fashion

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protective orders, and good cause exists to enter a protective order maintaining the claims handling

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manuals, claims files, and claim and/or log notes to be marked as “confidential” to protect confidential,

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proprietary, trade secret, or other information that State Farm is entitled to keep in confidence.

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DISCUSSION

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At the July 8, 2013, hearing, the court discussed the practical aspects of the parties’ dispute.

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Protective Orders governing confidentiality of documents are typically entered to facilitate the parties’

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discovery exchanges. However, Plaintiff is correct that blanket protective orders are disfavored, and

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that the burden is on the party asserting confidentiality to establish that the documents it seeks to treat

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as confidential are entitled to protection.

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A.

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Protective Orders
Fed. R. Civ. P. 26(c) permits the court in which an action is pending to “make any order which

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justice requires to protect the party or person from annoyance, embarrassment, oppression or undue

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burden or expense” upon motion by a party or a person from whom discovery is sought. The burden of

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persuasion under Fed. R. Civ. P. 26(c) is on the party seeking the protective order. Cipollone v. Liggett

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Group, Inc., 785 F.2d 1108, 1121 (3d Cir. 1986). To meet that burden of persuasion, the party seeking

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the protective order must show good cause by demonstrating a particular need for the protection sought.

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Beckman Indus., Inc., v. Int’l. Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992). Rule 26(c) requires more

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than “broad allegations of harm, unsubstantiated by specific examples or articulated reasoning.” Id.

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(citing Cipollone v. Liggett). “A party asserting good cause bears the burden, for each particular

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document it seeks to protect, of showing that prejudice or harm will result if no protective order is

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granted.” Foltz v. State Farm, 331 F.3d 1122, 1130 (9th Cir. 2003) (citing San Jose Mercury News,

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Inc., v. District Court, 187 F.3d 1096, 1102 (9th Cir. 1999)).
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In Seattle Times Co. v. Rhinehart, the Supreme Court interpreted the language of Fed. R. Civ. P.

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26(c) as conferring “broad discretion on the trial court to decide when a protective order is appropriate

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and what degree of protection is required.” 467 U.S. 20, 36 (1984). The Supreme Court acknowledged

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that the “trial court is in the best position to weigh fairly the competing needs and interests of the parties

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affected by discovery. The unique character of the discovery process requires that the trial court have

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substantial latitude to fashion protective orders.” Id. Although the trial court has broad discretion in

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fashioning protective orders, the Supreme Court has also recognized “a general right to inspect and

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copy public records and documents, including judicial records and documents.” Nixon v. Warner

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Communications, 435 U.S. 589, 597 (1978). However, the common law right to inspect and copy

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judicial records is not absolute. Id. Thus, the Supreme Court concluded, “[e]very court has supervisory

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power of its own records and files, and access has been denied where the court files might have become

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a vehicle for improper purposes.” Id.

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B.

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Unless court records are of the type “traditionally kept secret” the Ninth Circuit recognizes a

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“strong presumption in favor of access.” Foltz v. State Farm Mutual Auto Insurance Company, 331

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F.3d 1122, 1135 (citing Hagestad v. Tragesser, 49 F.3d 1430, 1434 (9th Cir. 1995)). Grand jury

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transcripts and warrant materials involved in pre-indictment investigations are two categories of

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documents and records which have “traditionally been kept secret for important policy reasons.” Times

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Mirror Co. v. United States, 873 F.2d 1210, 1219 (9th Cir. 1989). Although the federal common law

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right of access exists, it “does not mandate disclosure in all cases.” San Jose Mercury News, Inc., 187

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F.3d at 1102. The strong presumption in favor of public access recognized by the Ninth Circuit “can be

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overcome by sufficiently important countervailing interests.” Id. In the Ninth Circuit it is well

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established that the results of pretrial discovery are presumptively public. Id at 1103. The public is

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generally entitled to access to litigation documents and information produced in discovery unless the

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party opposing disclosure establishes good cause why a protective order is necessary. Philip v General

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Motors, 307 F 3d 1206, 1210 (9th Cir. (2002).

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The Presumption of Public Access

State Farm has indicated that it will be producing a substantial amount of materials responsive
to Plaintiff’s written discovery requests, and that it will, in good faith, designate some of its documents
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as “confidential.” State Farm will also serve a privileged document log for any responsive documents it

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withholds based on the assertion of any privilege. The court will enter a temporary protective order

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permitting State Farm to designate documents as “confidential” to facilitate the parties’ discovery

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exchanges, allow Plaintiff to review the responses, and require the parties to meet and confer

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concerning any dispute about whether any particular documents are appropriately designated as

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confidential. Entry of a temporary protective order should also narrow and focus any disputes about

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whether any particular documents State Farm designates as “confidential” are entitled to protection.

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The temporary protective order is entered as a practical, efficient and cost-effective manner to

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allow Plaintiff to obtain discovery sooner rather than later and narrow potential disputes. However,

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State Farm has not shown, and the court has not found, that any specific documents, or category of

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documents are secret or confidential or entitled to permanent protection. State Farm has not provided

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specific facts supported by affidavits or concrete examples to establish that a protective order is

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required to protect any specific trade secret or other confidential information pursuant to Rule 26(c) or

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that disclosure would cause it an identifiable and significant harm. The Ninth Circuit has held that

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there is a presumption of public access to judicial files and records and that parties seeking to maintain

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the confidentiality of documents attached to non-dispositive motions must show good cause exists to

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overcome the presumption of public access. Kamakana, 447 F.3d at 1179. A stricter standard applies

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to parties seeking to maintain the secrecy of documents attached to dispositive motions which requires

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that a showing of compelling reasons sufficient to overcome to presumption of public access. Id., at

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1180.

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For the reasons stated,

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IT IS ORDERED that a temporary protective order regarding designating documents as

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confidential in discovery is entered as follows:

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The parties may, in good faith, designate documents and/or information reasonably

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believed to constitute or disclose trade secrets, confidential research, development,

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testing, commercial information, medical information, or personal information the

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disclosure of which would cause an identifiable and significant harm as “confidential”.

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Documents designated by the parties as “confidential” shall, until further order of the
court, be used solely for the purposes of prosecuting and defending this case.

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Documents designated by the parties as “confidential” shall be made available to counsel

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for the parties, their support staff, and retained experts and consultants. Retained experts

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and consultants shall sign an acknowledgment agreeing to abide by this order.

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In the event the parties have a dispute about whether any specific document has

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appropriately been designated as “confidential” the parties shall confer in good faith in

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an attempt to informally resolve their dispute without court intervention. If the parties

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are unable to resolve their dispute(s) after a good-faith effort, the party asserting the

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document(s) is appropriately designated as “confidential” shall file a motion for

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protective order.

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Documents designated as “confidential” by either party shall be treated as confidential

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until the court enters an order deciding the designating party’s motion for protective

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order.

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Any party withholding documents or information responsive to discovery requests on the

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basis of privilege shall serve opposing counsel with a privileged document log which

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fully complies with Rule 26(b)(5).

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Unless otherwise permitted by statute, rule or prior court order, papers filed with the

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court under seal shall be accompanied by a motion for leave to file those documents

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under seal, and shall be filed in accordance with the court’s electronic filing procedures,

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and in accordance with the requirements of LR 10-5(b), and the Ninth Circuit’s decision

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in Kamakana v. City and County of Honolulu, 447 F.2d 1172 (9th Cir. 2006).

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Dated this 15th day of July, 2013.

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______________________________________
Peggy A. Leen
United States Magistrate Judge

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