Neutralizing Restrictive Confidentiality Orders

Before a defendant manufacturer will produce any responsive documents to discovery requests, it will insist upon a restrictive confidentiality order. Their lawyers will argue that the purpose of the confidentiality order is to protect the manufacturer’s “trade secrets” and proprietary information from dissemination to the public and their competitors.

Discovery in products liability lawsuits is an arduous process because the manufacturer, which is defending itself from claims of defective design and manufacture, has sole possession of the very documents needed for the Plaintiff to prove their case. Therefore, before the manufacturer will release any documents to the Plaintiff, it wants to impose rigid and restrictive conditions on who sees their documents and how they are utilized. Neutralizing these oppressive restrictions is essential for full and frank discovery and prosecution of any products liability lawsuit.

Florida law does protect trade secrets; however, this term has been repetitively stretched and abused by manufacturers in order to make the discovery process as difficult as possible. The true purpose of the trade secret doctrine is to protect a manufacturer’s competitive advantage. Florida statute 688.002 defines a “trade secret” as something that “derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use.¹

In Florida, the burden rests on the defendant manufacturer to prove that a requested document should be protected from production because the document is a trade secret² . Pursuant to Florida Statutes 90.506, the owner of a trade secret has the privilege of refusing disclosure of a competitive secret and to prevent other persons from disclosing it, provided that nondisclosure will not conceal fraud or otherwise work injustice. Florida Rule of Civil Procedure 1.280(c)(7) provides that upon motion and for good cause shown, the court may enter an order protecting the trade secret from disclosure or permitting disclosure in a designated way. The courts have held that after a resisting party has shown good cause for a protective order, the opposing party must demonstrate a reasonable necessity for the information³ . Defendants must show good cause for protection or the limitation of discovery by showing, not only that the information constitutes a trade secret, but that the disclosure of the information would be harmful⁴ . The trial court generally conducts an in-camera review of the documents in question⁵ .

In real-world application, the manufacturer’s burden is normally met through an affidavit of a corporate officer or high-level employee. The affidavit will typically claim how many man-hours and enormous expenses that went into development of the trade secret, as well as the irreparable harm that would result if the requested documents are even produced. If the Court finds that the requested documents constitute trade secrets, then the burden shifts to the Plaintiff to prove that there is a reasonable necessity for these documents⁶

Plaintiffs can avoid multiple hearings as to the issues of whether a particular document constitutes a trade secret and reasonable necessity, by agreeing to a confidentiality order with the manufacturer. However, the order must incorporate a system of checks and balances to protect Plaintiff from unjust and unfair discovery practices by defendants. By agreeing to a confidentiality order, the parties can circumvent the multi-step process as set forth above. The confidentiality order will allow the defendant manufacturer to label any document they produce as confidential in a watermark or some other fashion (so long as it does not interfere with the ability to read the document). The plaintiff must have the right to object within a reasonable period of time to any confidential designation by the defendant (usually a period of 45 to 60 days). A process should be set forth in the order to detail the process by which the Plaintiff can object to an erroneous or unsupportable designation. The trial court will normally look disfavorably upon frivolous designations by the defense. The order should also delineate who shall be able to view and utilize the confidential material. This normally includes the Plaintiff’s counsel, their employees, experts, consultants, court reporters, translators (defendants will rarely translate their own documents and will normally object to the Plaintiff’s translations), the judge and the jury. Manufacturers will also require that the order set forth when and how the documents will be returned or destroyed at the end of the case, although in rare circumstances, some documents will be retained by Plaintiffs indefinitely.

The single-most contested issue in the confidentiality order will be the inclusion of a sharing provision. A sharing provision allows plaintiff’s counsel to disclose the documents with other similarly situated plaintiffs that are also pursuing and investigating claims against the same manufacturers who arise from the same product and happen in a similar fashion. For example, a number of cases may involve an allegation of a defective car roof design which leads to crushing injuries of the driver or front-seat passenger, which involves a particular vehicle manufacturer’s platform, sold during a certain time frame. Before these documents can be shared among similarly situated plaintiffs, the party wishing to gain access to these documents must sign an affidavit attesting that he or she is pursuing a similar claim against the same defendant involving the same product and must submit to the jurisdiction of the governing court for enforcement of the order. Neither the party sharing the documents, nor the receiving party derive any benefit from public disclosure of any confidential documents or from violating the terms of the protective order. The defendant will require the plaintiff’s experts and consultants to sign this same affidavit before they are permitted to view the documents, so the defendants will find it difficult to argue that the affidavit is flawed or insufficient. Nonetheless, defendants will vehemently oppose the sharing of documents between plaintiffs’ attorneys.

Plaintiffs’ counsel cannot assume that the judiciary will be familiar with the concept of sharing or even confidentiality orders in general. Educating the court of the hidden issues is essential to winning this battle. It will be helpful to remind the judge that the true purpose of the trade secret privilege is to keep proprietary documents out of competitor’s hands and thereby, causing irreparable harm to the defendant. Most confidentiality orders expressly forbid disclosure of any confidential documents to the public and competitors. However, defendants will assert any possible reason to prevent the disclosure and sharing of their documents. In Wilson v. American Motors Corp., the 11th Circuit found that the defendant’s desire to prevent the use of its documents at trial and in other proceedings is simply not an adequate justification for non-disclosure or sealing of the trial record⁷ . In U.S. v. Hooker Chemicals & Plastics Corp., the court held that simply because the disclosure of confidential documents to other plaintiffs would be detrimental to defendant’s position in other cases, it was not a sufficient reason for a court to impose a protective order^8. Likewise, a desire to make discovery as burdensome as possible has also been found to be invalid reason for precluding document disclosure⁹ .

It is apparent the manufacturer’s goal in seeking a “non-sharing” protective order is to hinder the plaintiff’s prosecution of the case. By disallowing the sharing of confidential documents between similarly situated plaintiffs, the manufacturer ensures the isolation of each plaintiff. Without the ability to share documents, every case must start from scratch and undergo the same exact discovery battles that have occurred countless times in other cases. Along those same lines, an attorney unfamiliar with a particular manufacturer will be prevented from the benefits of discussing and analyzing key documents with other attorneys who have already discovered the importance of those same documents.

Many courts have never come across the issue of a sharing provision and are apt to grant a “non-sharing” protective order. Defendants often argue that there is no way for a judge in Florida to control or sanction a plaintiff across the country, who may violate the terms of the order. However, this argument completely glosses over the fact that parties must consent to the authority of the same Florida court by sworn affidavit before they can receive any documents. Although the Florida courts have not issued a specific opinion on the issue of sharing, other courts have expressed discontent with “non-sharing” protective orders.

“protective order was serving defendant well in the area unrelated to the protection in areas unrelated to the protection of trade secrets or legitimate procedural interests. First, while defendant may properly be protected from disclosure of its trade secrets, the order it sought and obtained was much broader…. Plaintiffs’ attorneys were prohibited from disclosing, discussing or referring to, with any person, any material, privilege or not, which was furnished by defendant. Fruitful consultation between plaintiffs’ attorneys with similar cases in other areas was thus effectively throttled… Defendant thus succeeded, to a very a significant degree, in isolating plaintiff from outside assistance and advice.”¹⁰

Non-sharing protective orders also allow manufacturers to selectively produce documents depending on the circumstances in a particular case. For example, if two identical cases are filed in different states and both have non-sharing protective orders entered, the manufacturer can pick and choose which documents it will produce in each of the cases. The documents produced in a case in Florida may be completely different than the documents produced in a case filed in Oregon, even though both cases involve the same exact product. Although such a discrepancy can be by mistake, most large-scale manufacturers retain national law firms that oversee document production and discovery responses for this very reason.

These national firms control discovery responses. A manufacturer’s national counsel makes the subjective and unilateral determination as to what is relevant to each individual case. They also determine the completeness and accuracy of the defendant manufacturer’s discovery responses. The national counsel has the benefit of knowing exactly how many lawsuits are pending, where they are filed, what the discovery requests in each case and how much experience a particular plaintiff’s counsel may possess. Yet they wish to isolate each case, so that each case must go through the same painstaking process to achieve essential documents from the manufacturer. It is the primary goal of national counsel to minimize the amount of documents produced in any particular case.

By incorporating a sharing provision into each and every confidentiality order, the plaintiff is given the most important check and balance to counteract the defendant’s absolute power on document production. Through sharing the documents produced in one case, an attorney in an identical case across the country can ensure full and frank discovery production and level the playing field.

Other provisions in the confidentiality orders should be incorporated to ease the admission of documents into evidence. Example of these provisions, include a business records exception and an authentication provision. These clauses dictate that if a defendant goes to the trouble to stamp a document confidential because it is their trade secret, then the document is automatically considered a business record under the 90.803 and authentic under 90.901 of the Florida Evidence code. Defendants should not be able to label their documents confidential because it contains their proprietary, closely held secrets, then turn around at trial and argue that it is not a business record or authentic.

Recently, the 3rd District Court of Appeal reviewed the issue of confidentiality order in the case of Jones v. Goodyear¹¹ . After a jury had rendered a verdict against Goodyear, finding that the tire in question was not only defective, but constituted a public hazard. As a result, the confidentiality order was vacated under the Sunshine Act¹² . The Sunshine Act prohibits any court from entering an order that has the effect of concealing a public hazard The appellate court specifically found that the trial court erred by issuing a confidentiality order without first holding a hearing to determine which documents related to a public hazard and if any of the documents related to a trade secret. The difficulty with this ruling is that the jury found that the tire constituted a public hazard, after hearing all of the evidence presented at trial. Most courts will be reluctant to find that a product is dangerous to the public at the onset of any case. The Third District Court has granted a stay in the case.

Our firm fights this battle daily. Recently, in Viel v. Kumho Tire Co., et al., the issue of a sharing provision was won at the trial court level in Orange County. Kumho Tire appealed the court’s entry of a sharing provision to the Fifth District Court of Appeals, where the lower court’s ruling was per curium affirmed. Kumho’s request for re-hearing was denied by the appellate court, but they proceeded to fight the exact same issue in Travis v. Kumho Tire Co. et al., in which a sharing protective order was also granted. Both protective orders are available online at Confidentiality Agreements, with other relevant documents on this topic.

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¹ Florida Statutes 688.002. See also Freedom Newspapers, 507 So.2d at 1184(emphasizing purpose of trade secret doctrine to keep information from competitors).
² Rare Coin-It v. I.J.E., Inc. 625 So.2d, 1277, 1278 (Fla. 3rd DCA 1993).
³ Eastern Cement Corp. v. Dept. of Environmental Regulation, 512 So.2d 264, 266, (Fla. 1st DCA).
⁴American Express Travel Related Services, Inc. v. Cruz, 761 So.2d 1206, 1208-1209 (Fla. 4th DCA 2000).
⁵ Id.
⁶Eastern Cement Corp., 512 So.2d at 266.
⁷ 759 F.2d 1568 (11th Cir. 1985).
⁸ 90 F.R.D. 421, 426 (W. D. N.Y. 1981).
⁹United Nuclear Corp. v. Crawford Ins. Co., 905 F.2d 1424, 1428 (10th Cir. 1990).
¹⁰ 1970 U.S. Dist. Lexis 12796 (W. D. Mich. 1970).
¹¹ 929 So.2nd 1081 (Fla. 3rd DCA 2005).
¹²Goodyear Tire & Rubber Co. v. Jones, 924 So.2d 820 (Table) (Fla.3rd DCA 2006).