United States District Court, N.D. California
DISCOVERY ORDER RE: DKT. NO. 100
S. HIXSON United States Magistrate Judge.
and counterclaimant Ken Gangbar Studio, Inc., has challenged
the confidentiality designations of 974 documents produced in
this action - 972 by third-party Defendant John Johnson and
two by non-party Monarch Art & Frame, Inc. The parties
were unable to resolve the challenge without court
intervention, so Plaintiff and counter-defendant Kevin Barry
Fine Art Associates (“KBFAA”) and Johnson moved
under paragraph 6.3 of the stipulated protective order to
retain the confidentiality designations of all 974 documents.
The moving parties argued that the documents fell into two
broad categories: first, documents that show commercial
information concerning their sales, costs, revenues and
business methods, which they say contain the moving
parties' confidential information; and second, documents
related to their projects for designers and end users who
conduct business with them with an expectation of
confidentiality, which they say contain their clients'
confidential information. Rather than putting all 974
documents before the Court, which the Court agrees is
infeasible, the moving parties proceeded by way of examples.
They initially filed 10 examples of each of the two
categories of documents as exhibits I and J to the Bolling
Declaration, ECF No. 100-3, but since the filing was in the
public record, it waived whatever confidential status the
documents previously may have had. The Court explained in its
December 13, 2019 Order that it was unwilling to make
confidentiality determinations using as examples documents
for which the moving parties had voluntarily waived
confidentiality. ECF No. 105.
Court is here now on the moving parties' second attempt.
With the 20 documents whose confidentiality has been waived
out of the way, there are now 954 documents at issue, 953
produced by Johnson and one by Monarch Art & Frame. The
moving parties have submitted 16 documents for in camera
review, 10 of which are in the second category and 6 of which
are in the first.
start with the second category. The moving parties say these
documents should be treated as confidential because they
contain client information, which KBFAA tells clients it will
keep confidential and which some of its written contracts
require to be kept confidential. KBFAA says that Johnson and
Monarch are independent contractors that KBFAA hires for
client projects, so KBFAA's confidentiality obligations
toward its clients also apply to Johnson and Monarch. As an
initial matter, Ken Gangbar asserts that it is inconsistent
with paragraph 9 of the protective order for parties to the
litigation to designate documents as confidential on the
ground that they contain a non-party's confidential
information. The Court disagrees.
9 of the protective order says:
(a) The terms of this Order are applicable to information
produced by a Non-Party in this action and designated as
“CONFIDENTIAL.” Such information produced by
Non-Parties in connection with this litigation is protected
by the remedies and relief provided by this Order. Nothing in
these provisions should be construed as prohibiting a
Non-Party from seeking additional protections.
(b) In the event that a Party (the “Responding
Party”) is required, by a valid discovery request, to
produce a Non-Party's confidential information in its
possession, and the Responding Party is subject to an
agreement with the Non-Party not to produce the
Non-Party's confidential information, then the Responding
(1) promptly notify in writing the Requesting Party and the
Non-Party that some or all of the information requested is
subject to a confidentiality agreement with a Non-Party;
(2) promptly provide the Non-Party with a copy of the
Stipulated Protective Order in this litigation, the relevant
discovery request(s) (with any materials designated as
Confidential by a separate Designating Party redacted), and a
reasonably specific description of the information requested;
(3) make the information requested available for inspection
by the Non-Party, making any necessary arrangements for the
redaction of materials designated Confidential by a party
other than the Non-Party.
(c) If the Non-Party fails to object or seek a protective
order from this court within 14 days of receiving the notice
and accompanying information, the Responding Party may
produce the Non-Party's confidential information
responsive to the discovery request. If the Non-Party timely
seeks a protective order, the Responding Party shall not
produce any information in its possession or control that is
subject to the confidentiality agreement with the Non-Party
before a determination by the court. Absent a court order to
the contrary, the Non-Party shall bear the burden and expense
of seeking protection in this court of its Protected
(a) states that the protections of the protective order are
applicable to documents produced and designated as
“confidential” by a non-party. However, virtually
all of the documents at issue here were produced by Johnson,
a party. It is common for a litigant to possess documents
that have somebody else's confidential information in
them - that happens a lot when a litigant has customers.
Paragraph 9(a) does not bar a litigant from designating its
own produced documents as confidential on the ground that
they contain third-party confidential information.
literalist might have a problem with KBFAA designating as
confidential a document produced by Monarch. It seems like
the proper procedure under paragraph 9(a) is for the
non-party to designate its documents as confidential if it
believes they are, so you could draw a negative inference
that if the non-party fails to do so, nobody else can. This
negative inference is bolstered by paragraph 5.2 of the
protective order, which suggests that confidentiality
designations are made by the producing party. However, in
this case we are dealing with the situation where the
producing party (Monarch) has a document that supposedly
contains somebody else's confidential information (the
client's), and Monarch's obligation to keep it
confidential is derivative of KBFAA's commitment to do
so. On these facts, there is nothing procedurally improper
about KBFAA's designating a document produced by Monarch
as confidential. Stated another way, Monarch's failure to
comply with the confidentiality obligations it assumed by
working for KBFAA (if it had any) should not bar KBFAA from
enforcing those obligations.
(b) and (c) of paragraph 9 address a different situation.
This is the situation where the producing party has promised
not to produce a non-party's confidential information.
These subsections create a mechanism by which the non-party
receives notice of the discovery request and then can move
for a protective order to try to stop the document
production. Here, Johnson and ...