Bobrick Washroom Equipment, Inc. v Scranton Products, Inc.

Filing 406

MEMORANDUM OPINION re: AEO designation (Order to follow as separate docket entry)Signed by Honorable Robert D. Mariani on 8/23/17. (jam)

THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
BOBRICK WASHROOM
EQUIPMENT, INC.
Plaintiff,

v.

3: 14-CV-00853
(JUDGE MARIANI)

SCRANTON PRODUCTS, INC.
Defendant.
MEMORANDUM OPINION
INTRODUCTION

I.

In the latest dispute between the parties, Plaintiff Bobrick Washroom Equipment, Inc.
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("Bobrick claims that Defendant Scranton Products, Inc. ("Scranton Products waived its
)

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right to designate certain information as attorneys' eyes only ("AE0

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).

Specifically, Bobrick

contends that Scranton Products' failure to timely designate as AEO portions of the
deposition transcript of Eric Jungbluth and documents produced by third party Washington
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Penn Plastics ("WPP in accordance with the time limitations set forth in the Modified
)

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Stipulated Protective Order ("MSP0 prohibits it from now designating this information as
)

AEO. (Doc. 60). Scranton Products, in contrast, asserts that its failure to timely designate
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was "inadvertent and therefore it is permitted to designate this information as AEO under
the plain language of the MSPO. Alternatively, Scranton Products' asks the Court to
exercises its discretion under Federal Rule of Civil Procedure 6(b)( 1)(8) and allow it to
make untimely designations.

II. STATEMENT OF FACTS
Two paragraphs of the MSPO are principally at issue in this dispute: paragraphs
3(c) and 4. 1 Paragraph 3(c) provides:
If any party wishes to designate as Confidential or Attorneys' Eyes Only documents
or things produced by a non-party during the course of this litigation within the scope
of paragraph 2 above, the designating party shall make such designation by: (i) if
the designation sought is Confidential, (A) informing the opposing party in writing as
to which specific documents are being designated Confidential and (8) producing to
the opposing party true and exact copies of the designated documents bearing the
confidentiality marking prescribed by Paragraph 3(a) of this Order; or (ii) if the
designation sought is Attorneys' Eyes Only, giving the notice and following the other
procedures required by Paragraph 3(b) of this Order.
Such Confidential
designations shall be completed and Attorneys' Eyes Only notices shall be given
within ten (10) calendar days of the designating party's initial receipt of the
documents or things produced by the non-party. Subject to the provisions of
paragraph 4 relating to inadvertent failure to designate, if no notice of a Confidential
or Attorneys' Eyes Only designation of non-party information is given within the time
prescribed in this paragraph, the documents and things produced by the non-party
will be considered devoid of Confidential and Attorneys' Eyes Only information.
(Doc. 60,

at~ 3(c)).

It is undisputed that Scranton Products did not designate certain

information in the documents produced by WPP until sixteen days after receipt of those
documents-six days later than permissible under the MSPO. It is also undisputed that

1 The

Court has written extensively on the language contained in the MSPO and need not repeat it
in detail here. See, e.g., Bobrick Washroom Equip. v. Scranton Prods., Inc., 3:14-CV-00853, 2017 WL
928917 (M.D. Pa. Mar. 8, 2017); Bobrick Washroom Equip. v. Scranton Prods., Inc., 3:14-CV-00853, 2017
WL 841286 (M.D. Pa. Mar. 3, 2017); Scranton Prods., Inc. v. Bobrick Washroom Equip., Inc., 190 F. Supp.
3d 419 (M.D. Pa. 2016).
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Scranton Products did not timely designate certain information in the deposition transcript of
Eric Jungbluth as AEo.2
The MSPO also contains a provision governing inadvertent failures to designate.
Paragraph 4 provides:
The inadvertent failure to designate or withhold any information as Confidential or
Attorneys' Eyes Only will not be deemed to waive a later claim as to its confidential
or privileged nature, or to stop the producing party from designating such information
as Confidential or Attorneys' Eyes Only at a later date in writing and with
particularity. The information shall be treated by the receiving party as Confidential
or Attorneys' Eyes Only from the time the receiving party is notified in writing of the
change in the designation. Notwithstanding the foregoing, a party may not, under
this Paragraph 4, (i) newly designate any information as Confidential or Attorneys'
Eyes Only or (ii) redesignate any information from Confidential to Attorneys' Eyes
Only, at any time later than ten (10) days before the first deposition taken by the
opposing party. A party may still make appropriate initial designations of newlyproduced information in accordance with the procedures and time limits set forth in
Paragraph 3.
(Id.

at~ 4).

According to Bobrick, nothing in the MSPO permits Scranton Products to now
attempt to designate certain information contained in the WPP production or Jungbluth
deposition as AEO. (Doc. 401 ). Scranton Products, in contrast, claims that the plain
language of the MSPO permits it to designate this information as AEO because its failure to
timely designate was "inadvertent." (Doc. 403). The Court held a telephone conference on
August 22, 2017 to discuss the parties' respective positions.

2 Under paragraph

3(d) the MSPO, Scranton Products was required to designate information as
Confidential or AEO within five (5) days of receipt of Mr. Jungbluth's transcript. Scranton Products failed to
do so until seven (7) days after receipt of the transcript.
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ANALYSIS

Ill.

At the outset, the Court notes that it rejects Scranton Products' interpretation of the
MSPO as set forth in its letter brief and advanced by counsel during the telephone
conference. Many of the arguments advanced by Scranton Products are illogical, circular,
and, in particular, the Court finds Scranton Products' reliance on the final sentence of
paragraph 4 of the MSPO to be misplaced. Nor does the Court find Bobrick's proposed
interpretation entirely persuasive. The Court, however, chooses not to make a definitive
interpretation of the language at issue in the MSPO. Rather, the Court will address whether
Scranton Products' failure to timely designate can be classified as "excusable neglect"
within the meaning of Federal Rule of Civil Procedure 6(b)(1)(8).3
Where, as here, a party failed to comply with a time limit set forth in a court order,
Federal Rule of Civil Procedure 6(b)(1)(8) provides that a Court may, for good cause,
extend a deadline "after the time has expired if the party failed to act because of excusable
neglect." Fed. R. Civ. P. 6(b)(1 )(8). "[T]he determination of whether a party's neglect is
excusable has been held to be an equitable determination," in which the Court considers "all
the relevant circumstances surrounding a party's failure" to timely act. In re Diet Drugs
Prods. Liab. Litig., 401 F.3d 143, 153 (3d Cir. 2005). To determine whether Scranton
Products has demonstrated "excusable neglect" the Court must consider four factors: "the
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order to avoid disputes of this kind in the future arising from the circular and inartful language
contained in paragraphs 3(c) and 4 of the MSPO, the parties are encouraged to jointly reform this language
in the MSPO. Absent the parties' ability to come to a joint agreement on the revised language, the Court
will take it upon itself to modify the language of paragraphs 3(c) and 4 of the MSPO-but only if the parties
jointly agree to permit the Court to do so.
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danger of prejudice to the [opposing party], the length of the delay and its potential impact
on judicial proceedings, the reason for the delay, including whether it was within the
reasonable control of the movant, and whether the movant acted in good faith." In re
O'Brien Envtl. Energy, Inc., 188 F.3d 116, 125 (3d Cir. 1999) (citing Pioneer Inv. Serv. Co.
v. Brunswick Assoc. P'Ship, 507 U.S. 380, 395, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993)).
The Court will address each in turn.
First, the Court sees no prejudice whatsoever to Bobrick if Scranton Products were
permitted to designate certain information in the WPP production and Jungbluth deposition
as AEO. Indeed, Bobrick made no attempt to argue how it is prejudiced by Scranton
Products' untimely designation, either in its letter brief or during the telephone conference. 4
In contrast, Scranton Products would no doubt be severely prejudiced. The information it
seeks to designate as AEO-the chemical composition of the products it manufactures and
pricing information-is the very type of information this Court has repeatedly held to be
properly classified as AEO. Without an AEO designation, information regarding Scranton
Products' pricing and the chemical composition of the products its manufactures would be
available for employees at Bobrick-Scranton Products' principal competitor-to review.
The lack of prejudice to Bobrick and the severe prejudice to Scranton Products' weighs in
favor of Scranton Products.
4 Scranton

Products' failure to timely designate this information as AEO permitted Bobrick to treat
the WPP production and Jungbluth deposition as merely Confidential, not AEO. Fortunately, Bobrick has
represented that it treated this information as AEO. Had it not done so, the Court's analysis would no doubt
be different.
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Second, the length of the delay also favors Scranton Products. Scranton Products
missed the deadline to designate information in the Jungbluth deposition as AEO by a mere
two days. It also missed the deadline to designate information in the WPP product by six
days. These modest delays had no impact on the proceedings, and Bobrick does not argue
to the contrary.
Third, the Court must consider the reasons for the delay. The Court is not at all
satisfied with Scranton Products' excuse for its failure to comply with the deadlines set forth
in the MSPO. Rather than counsel for Scranton Products taking responsibility for its
failures, counsel at Munger, Tolles & Olson LLP (again) casts blame on a docketing clerk in
its office.5 Counsel's excuse for missing the deadline is as follows:
Our firm's calendaring system for this matter did not automatically include deadlines
related to the Protective Order; unlike court deadlines, these need to be entered
manually. Unfortunately, and unbeknownst to the attorneys handling the matter,
these deadlines did not initially get entered manually into the calendaring system for
this case. Typically, these dates would get entered at the time a protective order is
negotiated and entered; because our firm did not negotiate the Protective Order, this
inadvertently did not occur, and the unique Protective Order deadlines did not get
systematically calendared as they would have had we negotiated the Protective
Order.
The particular deadlines at issue-a 10-calendar-day deadline for
designating third-party documents and a 5-calendar-day deadline for designating
deposition testimony-have not previously arisen between counsel from our firm and
counsel for Bobrick.
(Doc. 404-1,

at~

5). This excuse, and the failure of counsel at Munger, Tolles, &Olsen to

take responsibility for its actions, is unacceptable. It is simply unfathomable for the nine
s Counsel for Scranton Products previously missed the deadline to file an answer to Bobrick's
complaint. (Doc. 375). There, like here, Scranton Products claimed that "[d]ue to an inadvertent clerical
mistake at the law firm representing Defendant, the due date for the responsive pleading was miscalendared." (Doc. 374, at~ 6).
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lawyers at two firms representing Scranton Products in this matter to take no personal
responsibility for ensuring deadlines are complied with and casting blame on a docketing
clerk. These failures, though, are failures of counsel-not of Scranton Products itself.
Nevertheless, the Court concludes that the third factor weighs in favor of Bobrick.
Fourth, the Court must consider whether Scranton Products and its counsel have
acted in good faith. There are no facts indicating that either Scranton Products or its
counsel have acted in bad faith. Bobrick did not and does not argue to the contrary.
Accordingly, the Court finds this factor favors Scranton Products.
In sum, three of the four factors weigh in favor of Scranton Products leading the
Court to conclude that Scranton Products has demonstrated "excusable neglect" warranting
a modest extension of the deadlines set forth in the MSPO. The Court reaches this
conclusion despite counsel for Scranton Products' utter failure to offer a satisfactory
explanation for the delay. Nevertheless, the total absence of prejudice to Bobrick, the
severe prejudice to Scranton Products, the modest length of delay which had no impact on
the proceedings, and Scranton Products' good faith lead the Court to conclude it should
exercise its equitable discretion and grant Scranton Products' request to extend the
deadlines. Accordingly, Scranton Products may now properly designate the information in
both the Jungbluth deposition and WPP production as AEO despite failing to comply with
the time limitations set forth in the MSPO. Scranton Products and its counsel are put on
notice that the Court will not grant it such relief going forward. But, in this particular
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instance, the Court does not believe that Scranton Products should be penalized (and its
trade secret information made widely available to employees of its principal competitor)

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based on its counsel's failure to timely designate.

IV.

CONCLUSION

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For the foregoing reasons, the Court will grant Scranton Products' request to
designate certain information contained in the Jungbluth deposition and WPP production as

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AEO despite being untimely. A separate Order follows.

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obert D. Mariani
United States District Judge

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