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Sharing Provisions in Protective Orders

March 31, 2019 BY Ryan Del Campo

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We have noticed a troubling trend in recent product liability cases in which plaintiffs’ counsel will not agree to a protective order concerning a manufacturer’s confidential documents without the inclusion of a so-called “sharing provision”.   These provisions generally permit plaintiffs’ attorneys, or any other parties subject to the protective order, to indefinitely retain a defendant’s confidential documents and share them with third parties as they see fit.  Opposing counsel often justify such provisions by arguing that the confidential documents will only be shared with parties in other pending or litigation involving the same product.  However, many manufacturers understandably view these provisions as defeating the entire purpose of a protective order. 

Plaintiffs who insist upon the inclusion of these sharing provisions generally do so on the theory that the provisions will streamline discovery in collateral or future litigation involving the same products.  They may also argue that these provisions will help keep the defendants honest, as parties in the next round of litigation will already know about the documents in the manufacturer’s or seller’s possession.  These arguments do not sit well with manufacturers, especially those who build motor vehicles and other complex machines that are subject to rigorous testing. 

Under O.C.G.A. § 9-11-26(c)(7), a trial court “may make any order which justice requires to protect a party from annoyance, embarrassment, oppression, or undue burden or expense, including . . . [t]hat a trade secret or other confidential research, development, or commercial information may not be disclosed or be disclosed only in a designated way[.]”  This statute provides wide discretion to trial courts to craft a protective order that guards against the inappropriate dissemination of confidential information.[1]  Georgia trial courts also have an “obligation to assure that the scope of discovery is restricted to the extent necessary to prevent an unreasonable intrusion into the defendant’s privacy” and a party’s right to privacy must be accommodated during the civil discovery process.[2]  Although Georgia’s appellate courts have not taken up this exact topic, some trial courts in Georgia have gone so far as to provide a blanket statement that “a sharing provision is unnecessary and conflicts with the overall purpose of civil discovery.”[3]

Similarly, federal district courts in Georgia “may, for good cause, issue an order to protect a party . . . requiring that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way[.]”[4]  District courts also have wide discretion in crafting a protective order to protect the dissemination of confidential information.[5]  A defendant can show good cause for the entry of a protective order in Georgia’s federal courts by showing that widely disseminating the confidential information will “create a competitive disadvantage” for it.[6]  The U.S. District Court for the Northern District of Georgia has also expressed concerns that sharing protective orders unduly heighten the risk that the defendant’s competitors will gain access to the defendant’s confidential information since “the more widely confidential documents are disseminated, it becomes more likely that those documents will be released, and more difficult for the Court to enforce the terms of its protective order.”[7]

On the other hand, a plaintiff seeking to include a sharing provision in a protective order in the Northern District of Georgia “bears the burden to show that dissemination of [the defendant’s] confidential information is necessary” and that vague references to unspecified other litigation is insufficient.[8]  Where the plaintiff does not provide information regarding the other claims or the attorneys, experts, or consultants to whom he or she wishes to share confidential information, “the Court has no way to determine whether discovery . . . is even relevant to any other cases, which is a preliminary finding [the] Court should make in considering whether to permit the sharing of protected discovery.”[9]

So, what does this all mean?  Corporate defendants litigating in Georgia state courts can rely upon the language of O.C.G.A. § 9-11-26(c) to argue that their trade secrets and other confidential documents deserve legal protection from dissemination by plaintiffs, but otherwise have little to no appellate case law to back up this assertion.  However, it appears that Georgia’s trial courts are leaning in favor of protecting the documents from wide dissemination.

Federal courts in Georgia tend to offer more protection than their state-court counterparts, but also add requirements for both plaintiffs and defendants.  The defendants in federal courts must first show good cause for the entry of a protective order including a non-sharing provision, often based on the nebulous idea that dissemination will create a “competitive disadvantage” for it.  Once the makes this showing, the burden then switches to the plaintiff to show that dissemination is “necessary” and “relevant”.

One defense argument that has not been specifically addressed by any courts in Georgia to date is that plaintiffs who insist upon sharing protective orders often fail to recognize that a document that might be discoverable in Georgia state or federal courts may not be subject to discovery at all in another jurisdiction.  Therefore, defendants subject to sharing provisions would be required to constantly monitor the status of each sharing protective order it entered into to ensure that the sharing is done appropriately according to the law in the jurisdiction where collateral litigation may be pending.  As disputes as to the enforcement of protective orders generally remain in the jurisdiction of the court adjudicating the initial litigation, these sharing provisions would also place an undue burden on trial and district courts to ensure that any sharing is being done appropriately.

Several other jurisdictions appear to have lax rules that permit plaintiffs to include sharing provisions as part of the broad scope of discovery.  As Georgia law continues to develop, make sure you are mindful of the possibility that your opposing counsel may already be in possession your client’s discovery documents that were obtained from parties to prior similar litigation.

 

[1] See Agio Corp. v. Coosawattee River Resort Ass’n, 328 Ga. App. 642, 642-43 (2014); Harris v. Tenet Healthsystem Spalding, Inc., 322 Ga. App. 894, 901 (2013) (“What constitutes ‘good cause’ [sufficient for the entry of a protective order] must be left largely to the trial judge who has a latitude in determining whether the showing has been made.”)

[2] McGinn v. McGinn, 273 Ga. 292, 293 (2001).  See also Caldwell v. Church, 341 Ga. App. 852, 861 (2017) (O.C.G.A. § 9-11-26(c) does establish a general statutory basis for the entry of protective orders limiting or curtailing discovery under appropriate circumstances, provided such limitations do not have the effect of frustrating and preventing legitimate discovery.”).

[3] Stanfield v. Harley-Davidson Motor Co. Group, No. 12EV015674H, 2013 Ga. State LEXIS 360, at *1 (Ga. State Mar. 14, 2013.  See also Young v. Komatsu Am. Corp., No. 2011EV013075B, 2013 Ga. State LEXIS 1842, at *2-3 (Ga. State Feb. 18, 2013) (denying plaintiffs’ motion to compel defendants to produce their confidential and trade secret documents subject to a sharing protective order).

[4] Fed. R. Civ. P. 26(c).

[5] Farnsworth v. Procter & Gamble Co., 758 F.2d 1545, 1548 (11th Cir. 1985).

[6] Parsons v. Gen. Motors Corp., 85 F.R.D. 724, 726 (N.D. Ga. 1980).

[7] Williams v. Taser Int’l, Inc., No. 1:06-CV-0051-RWS, 2006 WL 1835437, at *1-2 (N.D. Ga. June 30, 2006).  See also, e.g., Gibson v. Ford Motor Co., No. 1:06*cv*1237-WSD, 2007 WL 2119008, 2007 U.S. Dist. LEXIS 52579, at *4 (N.D. Ga. July 19, 2007) (entering stipulated protective order allowing defendant to designate any document it wishes as confidential and subject to a non-sharing protective order); Dozier v. Waffle House, Inc., 2005 U.S. Dist. LEXIS 40245, at *44 (N.D. Ga. May 4, 2005) (“Plaintiffs’ slight interest in collaborating among other . . . litigants, and Defendant’s demonstrated interest in maintaining the confidentiality of these documents, the balance of interests weigh in favor of Defendant’s protective order[.]”).

[8] Porter v. Tyco Healthcare Group, LP, No. 1:08-CV-1203-CC, 2008 WL 11320000, at *2 (N.D. Ga. June 11, 2008).

[9] Id., citing Wilk v. American Med. Assoc., 635 F.2d 1295, 1300 (2d Cir. 1981) (holding that a relevance finding should be made before a court permits protected discovery to be shared with litigants in collateral proceedings).

The Journal is a publication for the clients of Drew Eckl & Farnham, LLP. It is written in a general format and is not intended to be legal advice to any specific circumstance. Legal Opinions may vary when based upon subtle factual differences. All rights reserved. 

Editorial Board:

H. Michael Bagley
(Editor-in-chief)