Diamond Consortium, Inc. v. Manookian

Filing 226

MEMORANDUM OPINION AND ORDER re 188 Emergency MOTION for Protective Order to Modify filed by Cummins Manookian, PLC, Brian Manookian, Brian Cummings. Defendants Emergency Motion to Modify Protective Order (Dkt. #188) is hereby DENIED. Signed by Judge Amos L. Mazzant, III on 5/31/17. (cm, )

United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION

DIAMOND CONSORTIUM, INC.; DAVID
BLANK
v.
BRIAN MANOOKIAN; CUMMINGS
MANOOKIAN, PLC; THE DALLAS
MORNING NEWS, INC; BRIAN
CUMMINGS; MARK HAMMERVOLD;
HAMMERVOLD, PLC

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Civil Action No. 4:16-CV-00094
Judge Mazzant

MEMORANDUM OPINION AND ORDER
Pending before the Court is Defendants’ Emergency Motion to Modify Protective Order
(Dkt. #188). After considering the pleadings and argument of counsel, the Court finds that the
motion should be denied.
BACKGROUND
On October 5, 2016, United States Magistrate Judge Christine A. Nowak entered a
protective order in this case (Dkt. #128). The protective order permits parties to designate certain
discovery material as “Attorneys’ Eyes Only.” On January 4, 2017, the Court granted Plaintiff’s
unopposed motion to clarify that reference to “Counsel” in the “Attorneys’ Eyes Only” provision
of the protective order “specifically excludes any attorneys (including their associates, paralegals,
legal assistants, secretarial and clerical employees) who are parties to the case, including but not
limited to Brian Manookian, Brian Cummings, Cummings Manookian, PLC, Mark Hammervold,
and Hammervold PLC.” (Dkt. #153).
On April 25, 2017, Defendant Mark Hammervold (“Hammervold”) appeared in this matter
as associate counsel for himself and Hammervold PLC (Dkt. #179). On May 2, 2017, Defendants
Brian Manookian (“Manookian”) and Brian Cummings (“Cummings”) filed an application to

appear pro hac vice in this matter. On May 9, 2017, Defendants filed an Emergency Motion to
Modify Protective Order (Dkt. #188). Defendants argue that the Court should remove the
protective order’s Attorneys’ Eyes Only designation because Plaintiffs abused the designation and
Defendants, as counsel of record in the case, are entitled to fully participate in their own defense.
On May 11, 2017, Plaintiffs filed a response (Dkt. #193). Plaintiffs respond that highly sensitive
information about themselves and their business cannot be shared with Defendants because they
continue to harass and threaten Plaintiffs. Plaintiffs also respond that Defendants could not appear
as co-counsel in the case because doing so would result in hybrid representation.
On May 19, 2017, the Court held a hearing regarding the motion. The Court orally denied
Defendants’ motion to modify the protective order.
LEGAL STANDARD
Rule 26(c) empowers the court to enter a protective order for good cause to protect a party
from, among other things, revealing certain commercially sensitive information. Fed. R. Civ. P.
26(c)(1)(G). “The court enjoys broad discretion in entering and modifying any such order.”
Raytheon Co. v. Indigo Sys. Corp., No. 4:07-CV-109, 2008 WL 4371679, at *2 (E.D. Tex. Sept.
18, 2008). “In deciding whether to modify a stipulated protective order at the behest of a party
that originally agreed to the order for reasons related to the private interests of the parties to the
action, the court considers four factors: (1) the nature of the protective order, (2) the foreseeability,
at the time of issuance of the order, of the modification requested, (3) the parties’ reliance on the
order; and most significantly (4) whether good cause exists for the modification.” Id. (internal
citations and quotations omitted). If good cause was not shown for the original protective order,
the burden of showing good cause is on the party seeking continued confidentiality protection.
United States v. Homeward Residential, Inc., No. 4:12-CV-461, 2016 WL 279543, at *4 (E.D.

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Tex. Jan. 22, 2016) (citing In re Enron Corp. Sec., Derivative, & ERISA Litig., 2009 WL 3247432,
at *2 (S.D. Tex. Sept. 29, 2009)).
ANALYSIS
The protective order at issue is a blanket order that “allows the parties to designate
information as protected that they, in good faith, deem to be worthy of heightened secrecy.”
Raytheon, 2008 WL 4371679 at *2. Though blanket orders are moderately susceptible to
modification, if the parties stipulated to the protective order, as in this case, that factor weighs
against modification. Id.
Although Defendants stipulated to the protective order, Defendants argue that modification
is appropriate because it was not foreseeable that Manookian and Cummings would enter an
appearance in the case. However, the Court denied Manookian and Cummings’s application to
appear pro hac vice in the case. Manookian and Cummings’s notice of appearance in the case thus
does not warrant modification of the protective order.
The next factor, the reliance factor, “focuses on the extent to which the party opposing the
modification relied on the protective order in deciding the manner in which documents would be
produced in discovery.” Id. at *3. Here, Plaintiffs allege Defendants engaged in a scheme to
defame and defraud Plaintiffs. Plaintiffs also allege that Manookian and Cummings currently
represent other jewelers.

Plaintiffs argue that the protective order is necessary to prevent

Manookian and Cummings from utilizing the confidential information to defame Plaintiffs and
disclosing confidential information to other jewelers. The reliance factor thus weighs against
modifying the protective order.
Finally, Defendants argue Plaintiffs have failed to show good cause for the protective order.
Defendants argue the case does not involve litigation between competitors. Defendants also argue

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Plaintiffs have abused the designation by postponing the deposition of a third party and designating
the deposition as Attorneys’ Eyes Only. Plaintiffs respond that counsel for the third party
designated the deposition Attorneys’ Eyes Only because “Defendants had waged a negative
advertising campaign” against the third party and counsel for the third party wished to restrict
Defendants’ access to his client. Plaintiffs argued that Defendants have not yet deposed Plaintiffs
or their former employees and Plaintiffs thus had not abused any Attorneys’ Eyes Only
designations.
The Court finds Plaintiffs established good cause for the protective order. Plaintiffs allege
Defendants may utilize the confidential information to continue to defame and defraud Plaintiffs
and may disclose confidential information to other jewelers. Defendants are represented by
counsel who have full access to any Attorneys’ Eyes Only documents. At the hearing, the Court
noted that if Plaintiffs or Defendants believed counsel improperly designated a deposition
Attorneys’ Eyes Only, the parties may contact the Court and have the issue resolved prior to or
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during the deposition.
CONCLUSION
It is therefore ORDERED that Defendants’ Emergency Motion to Modify Protective Order
(Dkt. #188) is hereby DENIED.
SIGNED this 31st day of May, 2017.

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AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE

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