Deffaa v. Pivotel America Inc. et al

Filing 70

ORDER: Accordingly, Defendants' motion for a protective order is denied, except to the extent that Defendants may redact "specific pricing information reflected in the second category of documents, "Communications and other document s dating from on or after July 1, 2020... reflecting the rates charged by or to the Transferred Companies or negotiations regarding amounts charged to or by the Transferred Companies." The Clerk of Court is respectfully directed to terminate the motion, Doc. 58. (As further set forth in this Order.) (Signed by Judge Edgardo Ramos on 9/9/2021) (cf)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
DEBORAH DEFFAA,
Plaintiff,
– against –

ORDER
20 Civ. 5466 (ER)

PIVOTEL AMERICA, INC., and PIVOTEL
GROUP PTY LIMITED,
Defendants.
Ramos, D.J.:
Before the Court is Pivotel’s letter motion for leave to move for a protective order
regarding the designation of certain documents as “Highly Confidential.” The Court assumes
familiarity with the background of this dispute. For the reasons set forth below and stated on the
record at the parties’ September 9, 2021 conference on this matter, Pivotel’s motion is deemed
made and DENIED, subject to Deffaa’s compromise position that Pivotel may redact “specific
pricing information” contained in “Communications and other documents dating from on or after
July 1, 2020. . . reflecting the rates charged by or to the Transferred Companies or negotiations
regarding amounts charged to or by the Transferred Companies.” Doc. 61 at 6; Doc. 58 at 2.
The protective order in this case provides that documents may be designated as “Highly
Confidential” or “Attorney’s Eyes Only (“AEO”) only if they “would create a substantial risk of
serious financial, competitive or other injury that cannot be avoided by less restrictive means.”
Doc 31 at ¶ 1.e. The protective order provides that once a confidentiality designation is
challenged, the burden is on the party seeking the “Highly Confidential” designation to move for
a protective order to maintain it. To establish that it is entitled to a protective order, Pivotel must

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demonstrate that “[1] the information sought is a trade secret or other confidential information,
and [2] that the harm caused by its disclosure outweighs the need of the party seeking the
disclosure.” Chembio Diagnostic Sys., Inc. v. Saliva Diagnostic Sys., Inc., 236 F.R.D. 129, 136
(E.D.N.Y. 2006). As Deffaa notes, is Pivotel’s burden to justify the confidentiality of each
document for which AEO designation is sought. Doc. 61 at 2 (citing Schiller v. City of New
York, 04 Civ. 7922, 2007 WL 136149, at *4 (S.D.N.Y. Jan 19, 2007)).
While the parties apparently agree that this information has properly been designated as
confidential, Pivotel has not met its burden to show that the categories of information it seeks
should be subject to the heightened “Highly Confidential” designation, for several reasons.
First, Pivotel has failed to meet its burden to show that Highly Confidential treatment is
merited for each and every document. See Schiller, 2007 WL 136149, at *4. While Pivotel has
apparently trimmed down its list of documents from over 14,000 to approximately 2,100, it has
still not described with specificity why all 2,100 of these documents merit such highly protective
treatment. While the Court previously permitted Pivotel to describe these documents by
category, rather than describe each document individually, the Court still must have a basis on
which to conclude that these categories in fact cover highly sensitive material. Here, however,
the categories described by Pivotel remain quite vague and could encompass a broad scope of
documents.
Second, the two categories of documents identified by Pivotel are too broad and general
for the Court to conclude that their disclosure to Deffaa would cause “a substantial risk of serious
financial, competitive or other injury that cannot be avoided by less restrictive means,” see Doc
31 at ¶ 1.e., particularly given Deffaa’s proposed compromise to redact pricing figures on certain
documents post-dating July 1, 2020. Regarding the first category of documents, Pivotel has

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only identified the common threads of “client lists” and “documents of a financial nature.” See
Doc. 58 at 2. This is insufficient to demonstrate exactly why these documents should be so
highly protected. See, e.g., Broadspring, Inc. v. Congoo, LLC, No. 13 Civ. 1866 (JMF), 2014
WL 4100615, at *21 (S.D.N.Y. Aug. 20, 2014) (noting that conclusory assertions that disputed
documents dealt with topics such as “client acquisition strategy” and “client retention strategy”
were insufficient to merit AEO status). Moreover, while Pivotel’s second proposed category—
documents reflecting amounts charged by the transferred companies after July 1, 2020—is more
specific, Pivotel provides no reason why its concerns about any harm from the disclosure of
highly sensitive information were not addressed by Plaintiff’s suggestion that the actual price
terms be redacted from these documents. See Broadspring, 2014 WL 4100615, at *20 (noting
that even if a single line is properly redacted as AEO, this would not justify withholding an entire
document).
Third, and more fundamentally, Pivotel’s motion is predicated on the assumption that
Deffaa will violate the existing protective order in this case, as well as perjure herself, as she has
asserted in a sworn declaration that she will abide by the protective order. See Doc. 47-2 at ¶ 15.
While the Court recognizes that Pivotel has accused Deffaa of dishonest behavior in the past, this
conduct is disputed, and the Court also recognizes Deffaa’s argument that she has been retired
for two years and has no interest in using this information against Pivotel. On balance, the Court
finds that, given that Deffaa has been warned about the importance of abiding by the protective
order, Pivotel has not met its burden of showing a substantial risk of harm that would result from
disclosure to her. As counsel for Deffaa notes in its letter, the parties have identified no case in
which AEO designation was upheld simply due to one party’s mistrust of another. Doc. 61 at 5.

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Finally, Deffaa has demonstrated a compelling need for these documents. Her core claim
in this case hinges on how much revenue Pivotel generated in the year following the stock
purchase agreement (“SPA”) in this case, and whether this revenue was calculated in a manner
consistent with the parties’ understanding and the transferred companies’ past practices. Pivotel
has essentially argued that any documents reflecting how such revenue was generated and
calculated cannot be shared with Deffaa herself. Because Deffaa owned the transferred
companies for decades before the SPA was executed in 2019, the Court recognizes that she is
likely in the best position to help counsel understand many of these documents, particularly
given that she is proceeding as an individual—as opposed to through a corporate entity that may
have other individuals with comparable expertise to review the documents.
Accordingly, Defendants’ motion for a protective order is denied, except to the extent
that Defendants may redact “specific pricing information” reflected in the second category of
documents, “Communications and other documents dating from on or after July 1, 2020 . . .
reflecting the rates charged by or to the Transferred Companies or negotiations regarding
amounts charged to or by the Transferred Companies.” The Clerk of Court is respectfully
directed to terminate the motion, Doc. 58.
It is SO ORDERED.
Dated:

September 9, 2021
New York, New York
EDGARDO RAMOS, U.S.D.J.

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