Those Certain Underwriters at Lloyds London Subscribing to Certificate No SUA WS20114-1601 v. iStream Financial Services Inc et al

Filing 21

ORDER signed by Judge J.P. Stadtmueller on 8/3/2017: GRANTING 17 Parties' Joint Motion for Protective Order and SPECIFYING the terms as modified for confidential information produced or disclosed during this matter. See Order for further details. (cc: all counsel) (jm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
THOSE CERTAIN UNDERWRITERS AT
LLOYD’S, LONDON, SUBSCRIBING TO
CERTIFICATE NO. SUA WS20114-1601,
Plaintiffs,
Case No. 17-CV-597-JPS

v.
ISTREAM FINANCIAL SERVICES,
INC., KRIS AXBERG, RICHARD
JOACHIM, and CHET ANDREWS,

ORDER

Defendants.
On July 25, 2017, the parties filed a joint motion for entry of a
protective order. (Docket #17). The parties request that the Court enter a
protective order so that they may avoid the public disclosure of confidential
information and documents. Id. Rule 26(c) allows for an order “requiring
that a trade secret or other confidential research, development, or
commercial information not be revealed or be revealed only in a specified
way.” Fed. R. Civ. P. 26(c)(1)(G), Civil L. R. 26(e).
The Court sympathizes with the parties’ request and will grant it,
but, before doing so, must note the limits that apply to protective orders.
Protective orders are, in fact, an exception to the general rule that pretrial
discovery must occur in the public eye. Am. Tel. & Tel. Co. v. Grady, 594 F.2d
594, 596 (7th Cir. 1979); Fed. R. Civ. P. 26(c); see also Citizens First Nat’l Bank
of Princeton v. Cincinnati Ins. Co., 178 F.3d 943, 945–46 (7th Cir. 1999).
Litigation must be “conducted in public to the maximum extent consistent

with respecting trade secrets…and other facts that should be held in
confidence.” Hicklin Eng’r, L.C. v. Bartell, 439 F.3d 346, 348 (7th Cir. 2006).
Nonetheless, the Court can enter a protective order if the parties
have shown good cause, and also that the order is narrowly tailored to
serving that cause. Fed. R. Civ. P. 26(c); see, e.g., Citizens First Nat’l Bank of
Princeton, 178 F.3d at 945, Jepson, Inc. v. Makita Elec. Works, Ltd., 30 F.3d 854,
858 (7th Cir. 1994) (holding that, even when parties agree to the entry of a
protective order, they still must show the existence of good cause). The
Court can even find that broad, blanket orders are narrowly tailored and
permissible, when it finds that two factors are satisfied:
(1)

that the parties will act in good faith in designating the
portions of the record that should be subject to the protective
order; and

(2)

that the order explicitly allows the parties to the case and
other interested members of the public to challenge the
sealing of documents.

County Materials Corp. v. Allan Block Corp., 502 F.3d 730, 740 (7th Cir. 2006)
(citing Citizens First Nat’l Bank of Princeton, 178 F.3d at 945). The parties have
requested the protective order in this case in good faith; they seek the order
so that they might freely exchange sensitive information including, for
example,

sensitive

employee

information,

proprietary

business

information, and confidential information collected by the Federal Trade
Commission pursuant to 15 U.S.C. § 57b. (Docket #17 at 1-2). The Court thus
finds that there is good cause to issue the requested protective order.
However, the Court finds that two slight changes are necessary to
maintain compliance with the above-cited precedent. First, the proposed
order requires sealing, in whole or in part, of all confidential documents.

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This departs from the Court’s desire to ensure that every phase of the trial
occurs in the public eye to the maximum extent possible. See Hicklin Eng’r,
L.C., 439 F.3d at 348. While the Court understands that some documents
will need to be sealed entirely, other documents may contain only small
amounts of confidential information, and so redaction of those documents
may be more appropriate. The Court has modified the parties’ proposed
language to that effect. See supra Paragraph 4. Second, consistent with the
Court’s and this district’s standard practice, the Court will allow members
of the public to challenge the confidentiality of documents filed in this case.
See supra Paragraph 5.
Finally, the Court must note that, while it finds the parties’ proposed
order to be permissible and will, therefore, enter it, the Court subscribes to
the view that the Court’s decision-making process must be transparent and
as publicly accessible as possible. Thus, the Court preemptively warns the
parties that it will not enter any decision under seal.
Accordingly,
Based on the parties’ joint motion, (Docket #17), and the factual
representations set forth therein, the Court finds that exchange of sensitive
information between or among the parties and/or third parties other than
in accordance with this Order may cause unnecessary damage and injury
to the parties or to others. The Court further finds that the terms of this
Order are fair and just and that good cause has been shown for entry of a
protective order governing the confidentiality of documents produced in
discovery, answers to interrogatories, answers to requests for admission,
and deposition testimony.
IT IS ORDERED that, pursuant to Fed. R. Civ. P. 26(c) and Civil L.
R. 26(e):
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THOSE CERTAIN UNDERWRITERS AT LLOYD’S, LONDON,
SUBSCRIBING

TO

CERTIFICATE

NO.

SUA

WS20114-1601

(“Underwriters”), iSTREAM FINANCIAL SERVICES, INC. (“iStream”),
KRIS AXBERG (“Axberg”), RICHARD JOACHIM (“Joachim”), CHET
ANDREWS (“Andrews”) (iStream, Axberg, Joachim and Andrews are
referred collectible herein as the “iStream Defendants”) (individually a
“Party” or collectively the “Parties”), recognize that in the course of
discovery proceedings it will be necessary for the Parties to disclose certain
confidential information, but all Parties wish to ensure that such
confidential information shall not be used for any purpose other than the
proceedings in this case (the “Litigation”).
Specifically, the Parties recognize that in the course of these
proceedings it will be necessary for the Parties to disclose confidential
business information, such as materials that a Party believes in good faith
contain trade secrets, non-public information relating to customers of any
Party, personal information regarding that Party or current and former
employees of that Party, information that the Party has otherwise agreed to
keep confidential, or sensitive commercial, financial, technical, marketing
or proprietary business information (“Confidential Business Information”).
Each Party wishes to ensure that such Confidential Business Information
shall not be used for any purpose other than the proceedings in the
Litigation.
The Parties further recognize that in the course of these proceedings
it may be necessary for the Parties to disclose to the Court or to each other
certain confidential and proprietary insurance information, claims
communications and other documents and information that may be

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deemed

privileged

as

to

third

parties

(“Confidential

Insurance

Information”).
Finally, certain documents at issue in this case are confidential
pursuant to 15 U.S. Code § 57b, which applies to information collected by
the Federal Trade Commission (“FTC”) pursuant to compulsory process
(Confidential FTC Information). Specifically, certain materials related to the
investigation of the iStream Defendants and claims against the
iStream Defendants by the FTC are confidential. Accordingly, the Parties
wish to protect the confidentiality of such Confidential FTC Information to
the greatest extent feasible and to ensure that such Confidential FTC
Information shall not be open to the public or used for any purpose other
than the proceedings in the Litigation.
Therefore, to comply with the confidentiality provisions of 15 U.S.
Code § 57b and for the protection of Confidential Business Information,
Confidential Insurance Information and Confidential FTC Information
(collectively referred to herein as “Confidential Information”), the Parties
agree that the handling of all documents and other forms of information in
the Litigation shall be subject to the applicable privacy rules set forth in
Federal Rule of Civil Procedure 5.2. In addition, the Parties to this
Stipulated Protective Order explicitly agree to the following conditions and
procedures (which shall also be binding on all parties to the Litigation):
1)

Designation and Marking of Documents.

Designation of

Confidential Information under this Protective Order shall be made by
placing or affixing on the document in a manner that will not interfere with
its legibility the words “CONFIDENTIAL – SUBJECT TO PROTECTIVE
ORDER” accompanied by the case number or other reference sufficient to
identify the Litigation.
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(a)

It shall be the duty of the Party producing Confidential

Information (the “Producing Party”) to mark or otherwise indicate
that such information is covered by this Protective Order and is to
be considered Confidential Information.
(b)

The designation of information as Confidential

Information shall be made prior to, or contemporaneously with, the
production or disclosure of that information.
(c)

No Receiving Party shall provide any Producing

Party’s Confidential Information to anyone else, unless it is
determined pursuant to Paragraph 5, below, that the confidentiality
designation is unwarranted, either by ruling of a court, or by
agreement.
(d)

Disclosure of information extracted from documents

or deposition testimony that contains Confidential Information is
authorized only with written consent from the Producing Party,
absent a ruling of a court or agreement in accordance with
subparagraph c), above. All copies, abstracts, excerpts, analyses, or
other writings that contain, reflect, or disclose the substance of
documents or deposition testimony designated as Confidential
Information shall also be deemed Confidential Information.
Unauthorized disclosure of information extracted from documents
or deposition testimony designated as Confidential Information is
prohibited.
2)

Depositions.

All testimony taken by deposition in the

Litigation that is related to any Party’s Confidential Information, whether
by subpoena or notice of taking deposition, will be subject to the terms of
this Protective Order. Only the Producing Party, the Receiving Parties and
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their respective counsel, employees, consultants or experts, as identified in
Paragraph 3, below, may attend such depositions (or portions of a
deposition relating to a Producing Party’s Confidential Information). In
addition, transcripts of such depositions shall be presumed to be
Confidential Information for ten business days after the receipt of
transcript, during which time the Producing Party may designate portions
of the testimony as Confidential Information by providing to counsel for
the Party who took the deposition a written description, specifying the
pages and line numbers that are to be designated as Confidential
Information. A Producing Party also may make that designation on the
record at the time of the deposition.

The cover and each page of a

deposition transcript containing testimony that is Confidential Information
shall be marked as required by Paragraph 1.

Counsel for any Party

receiving a copy of a deposition transcript shall be responsible for marking
the copy as required by this Protective Order.
3)

Disclosures. Material designated as Confidential Information

shall be viewed only by the Producing Party, the Receiving Parties, and
their counsel, except that disclosures may be made in the following
circumstances:
(a)

Disclosure may be made to employees of counsel for

the Producing Party or Receiving Parties who are assisting with or
working on the Litigation. Any such employee to whom counsel for
the Producing Party or Receiving Parties makes a disclosure shall be
advised of, and become subject to, the provisions of this Protective
Order requiring that the documents and information be held in
confidence.

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(b)

Disclosure may be made to court reporters engaged for

depositions and those persons, if any, specifically engaged for the
limited purpose of making photocopies of documents.
(c)

Disclosure may be made to vendors, consultants,

investigators, or experts (hereinafter referred to collectively as
“experts”) employed by the Producing Party or Receiving Parties, or
by counsel for the Producing Party or Receiving Parties, to assist in
their work on the Litigation. Prior to disclosure to any expert, the
expert must be informed of and agree to be subject to the provisions
of this Protective Order requiring that the documents and
information be held in confidence.
4)

Filing With Court. To the extent that any written material

containing Confidential Information is to be filed with the Court, those
papers must be redacted only to the extent necessary. If the parties seek to
seal a document, either in part or in full, they must file a motion to seal that
document, together with a redacted copy on the record. They must also
simultaneously file unredacted copies under seal with the Clerk of Court
via the CM-ECF system. The parties shall act in good faith in designating
records to be filed, in whole or in part, under seal.
5)

Challenge to Confidentiality Designation. A party or

interested member of the public may challenge the designation of
confidentiality by motion. If a Receiving Party wishes to challenge a
designation of a document or deposition testimony as Confidential
Information, counsel for the Receiving Party shall first request of the
Producing Party’s counsel in writing one or more of the following: (1)
consent to a specified disclosure of the document or deposition testimony,
or a portion thereof, or (2) the voluntary withdrawal of the designation. The
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Parties shall attempt to resolve such a request by agreement prior to seeking
relief from the Court. In the event no resolution is reached by the Parties,
or in the event that an interested member of the public wishes to challenge
a designation of confidentiality, a challenge may be made by motion,
subject to the provisions of Civil L.R. 26(e). Until and unless any challenge
to the confidentiality of Confidential Information is resolved in the
movant’s favor, all documents and/or deposition testimony shall remain
protected under this Order as set forth herein.
6)

Final Determination.

Upon final determination of the

Litigation (including the termination of all appeals and the expiration of the
time for seeking certiorari from the Supreme Court), all Parties in receipt of
Confidential Information, within sixty (60) days of such determination,
shall destroy all Confidential Information in their possession, subject to any
state or federal record keeping obligations such as the Federal Records Act,
44 U.S.C. Chapter 31, or the Wisconsin Public Records Law, Wis. Stat. §§
13.31-37.

Further, at the request of any Party, and again upon final

determination of the Litigation, the Clerk of the Court shall return any item
filed under seal to the filing Party. After the final determination of the
Litigation, the provisions of this Protective Order shall continue to be
binding upon all counsel, and the Parties and their officers and employees,
witnesses, and all others subject to this Protective Order.
7)

Disclosure. The inadvertent or unintentional disclosure of

Confidential Information by any Party shall not be deemed a waiver in
whole or in part of the confidential nature of the material disclosed. In the
event of such an inadvertent disclosure, the Producing Party may thereafter
assert a claim or designation of confidentiality and promptly provide
replacement media containing documents properly marked as Confidential
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Information. Thereafter, the Receiving Party must immediately return or
destroy the original documents and all copies of the same to the Producing
Party and make no use of such documents.
8)

Privilege and Non-Waiver of Rights.

Nothing in this

Protective Order shall require (a) production of Confidential Information,
or (b) disclosure of material that counsel for a Party or a third party
contends is (1) protected from disclosure by the attorney-client privilege,
the work-product doctrine, the joint defense or common interest privilege,
the mediation privilege, the settlement privilege and/or any other
applicable privilege, or (2) not subject to discovery or disclosure under
Federal Rule of Civil Procedure 26 or any other applicable discovery
protection. No Party’s consent to entry of this Protective Order shall
constitute, or be deemed to constitute, a waiver of any ground or basis for
objecting to a discovery request.
Dated at Milwaukee, Wisconsin, this 3rd day of August, 2017.
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

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